NYBOT cotton futures tumbled to a lower close Thursday on combined trade sales and speculative liquidation in slow business, with operators saying cotton may consolidate near its lows while waiting for news to give it direction on its next move.Key December cotton fell 0.75 cent to settle at 48.78 cents a lb, moving from 49.65 to a new contract low of 48.55 cents.
Front July expired 1.88 cents lower at 44.87 cents. Distant months slid 0.25 to 0.85 cent.
"Theres not enough energy to get us up and going," said Sharon Johnson, cotton expert for Frank Schneider and Co Inc in Atlanta, Georgia.
Speculative liquidation tied to expiration of spot July deflated fibre contracts and the weakness there spilled over into October and the now-benchmark December contract.
But dealings were very modest and market players were weighing the fundamental outlook of maturing crops in the US and China, the worlds leading consumer of cotton.
"The path of least resistance was down, but well see where we go from here now that July is done," a trader said.
Looking toward the weekly USDA export sales report due out tomorrow, brokers said combined US upland cotton sales will likely range from 250,000 to 300,000 running bales (RBs, 500-lbs each), against combined sales of 273,200 RBs in last weeks report.
Further out, the trade will be looking at the monthly USDA supply/demand report on Monday.
Most of the trade does not expect major changes in the data, except for an upward revision of the forecast for US cotton production following release of the USDAs annual acreage report at the end of June.
Analysts believe the US will produce between 17.9 and 18.4 million (480-lb) bales of cotton, up from the USDA production report forecast last month of 17.6 million bales.
Brokers Flanagan Trading Corp feels resistance in December cotton would be at 49.30 and 50 cents, with support at 48.50 and 47.50 cents. Floor dealers said estimated final volume amounted to 6,000 contracts, from the prior tally of 5,150 lots. Open interest rose 81 lots to 74,682 lots as of July 7.