NYCE cotton futures were bombarded by a steady round of speculative sales to settle softer on Tuesday, with follow-through pressure seen dragging the market down further this week, analysts said.
July cotton tumbled 1.27 cents to end at 62.94 cents a lb, ranging between 62.65 and 64.70 cents.
New-crop December fell 0.89 cent to 59.91 cents. Losses in the back months reached from 0.55 to 1.08 cents.
Joe Carney of brokers iamhedged.com in Memphis, Tennessee, said speculators "whacked" futures, with some trade accounts piling in for good measure by selling the market.
"Spec selling's hitting it hard," added Mike Stevens, an analyst for Swiss Financial Services in Mandeville, Louisiana.
Scale-down trade buying sought to stem the fall in fiber contracts, but the market touched off automatic sell orders when spot July slipped below 64 cents and 63 cents, brokers said.
Analysts said the downward pressure on prices was likely aggravated by overnight falls in cotton prices in China, which has emerged as the world's key buyer of cotton.
Brokers Flanagan Trading Corp said in a daily commentary the price slide in China probably reflects an attempt "to slow their economy. This is not supportive to cotton futures."
Weakness in soybean and corn futures in Chicago likely added to the pressure felt in the cotton pit, they said.
Traders took note of the weekly USDA crop progress report where the government said that as of May 16, 2004, 60 percent of the US cotton crop has been planted compared with 53 percent at this time last year.
The weekly New York Board of Trade spec/hedge report showed funds with a net short position of 25.9 percent, from 27.9 percent short last week.
Flanagan Trading Corp sees support in the July contract at 62.60 cents and 62 cents, while resistance was at 63 cents and 64 cents.
Floor dealers pegged estimated volume at 8,500 lots, versus the prior tally of 7,516 contracts. Open interest in the cotton market rose 53 to 80,816 contracts as of May 17.