Cotton futures settled in negative territory, with follow-through speculative liquidation pushing benchmark fibre to a new contract low earlier in the session, market sources said.
The New York Board of Trade's July cotton contract eased 0.19 cent to settle at 49.17 cents a lb., having dealt from a contract low of 48.75 to an intraday peak of 49.75.
New-crop December slipped 0.20 cent to end at 53.91 cents, after marking a contract low of 53.55 cents. Longer-dated positions shed 0.50 to 0.22 cents.
"The market is definitely technically dominated," said Keith Brown of Georgia-based commodity brokerage Keith Brown and Co.
"We are getting the new crop planted, but there is just no threat to the crop. The (new) crop doesn't look that good, but still the overriding factor is that there is too much cotton," he said.
In its first estimate for the upcoming 2006/07 marketing year (August/July), the US Agriculture Department last week pegged world cotton output at 115 million bales, up from 113.41 million bales the previous season.
Still, the USDA expects 2006/07 world consumption to rise to 122 million bales from 117.2 million bales, fuelling market speculation the bearish trend may be nearing an end.
"The market is quite oversold now," said John Flanagan of brokerage Flanagan Trading Corp in North Carolina. "There was good fundamental news last week on the supply-demand report," he said.
On the weather front, US cotton growers welcomed weekend rains in Texas, the top growing state, which has been hit by a dry spell during the spring planting season.
"Weekend rains in south Texas were of some benefit in the Coastal Bend, but were too late for the Rio Grande Valley," Meteorlogix said in its latest crop outlook.
The private weather service predicted mostly dry conditions in the Texas cotton belt Wednesday through Friday, with peak temperatures reaching 100 degrees (38 Celsius).
Floor dealers said final trading volume was estimated at 11,000 lots, well below the 20,083 lots officially tallied the previous session. Open interest rose by 1,001 lots on May 19 to a total of 174,180 contracts, exchange data showed.