NYCE cotton futures finished easier Monday on modest trade and speculative sales, with most players warily monitoring news that robust economic growth in top buyer China may soon slow down, analysts said.
July cotton fell 0.76 cent to close at 64.21 cents a lb, moving from 63.50 to 64.50 cents. New-crop December shed 1.08 to 60.80 cents and the distant months tumbled 0.50 to 1.37 cents.
Frank Weathersby of brokers Affinity Trading in Fort Walton Beach, Florida, said trade and speculative sales nudged cotton lower and most operators seemed to sit back to wait for news to give the market direction on its next move.
Other analysts said the market wanted more clarification from a slew of news reports that rampant growth in China's economy could soon slow sharply.
China has turned into a major force in commodity markets, with its heavy buying of everything from soybeans to cotton stoking robust rallies in futures markets.
"There is a lot of concern that a slowdown in China could eventually hit cotton demand and prices," a floor dealer at the New York Board of Trade said.
According to the latest USDA data, the Chinese have bought so far 4.78 million running bales (RBs, 500-lbs) of US upland cotton in the 2003/04 marketing year (August/July), compared with 1.687 million RBs purchased at this time last year.
That buying powered cotton futures in New York last October to their highest level since late 1995, with the then spot December cotton contract hitting a contract peak of 84 cents.
There is also uncertainty about reports that China plans to raise its reserves of high-grade cotton by over 450,000 (480-lb) bales. "We don't know the grades involved and how the whole thing breaks down," one trading house broker said.
Brokers Flanagan Trading Corp calculated resistance in the July contract at 65.50 and 66.15 cents with support at 64 and 63 cents.
Floor dealers pegged estimated volume at 7,500 lots, down from Friday's tally of 11,814 contracts. Open interest fell 1,168 lots to 80,763 contracts as of May 14.