NEW YORK: ICE cotton futures took a breather on Thursday from a blistering rally that has seen prices reach their highest level since mid-2011 to lock in profits, following a federal report that showed lower export sales of the fiber.

The cotton contract for December fell 0.37 cent, or 0.3%, to 110.69 cents per lb, at 13:00 p.m. EDT (1700 GMT).

"Wednesday's settlement pulled back from the limit up seen early in the morning, which looked like profit-taking from investors, and today is a continuation of that," with some skipped over orders also being fulfilled, said Bailey Thomen, cotton risk management associate at StoneX Group.

The upper limit of 113.93 cents per lb hit on Wednesday set an all-time peak for the December contract, and a high since September 2011 for the second month cotton futures contract , for the second session in a row.

The higher prices scared some traders out, but today could be viewed as another entry point into the market, Thomen said. "Unfortunately, this week the export sales report was not very outstanding, but that was expected as China has been out celebrating its National Day holiday."

The US Department of Agriculture's weekly export sales report showed net sales of 246,700 running bales (RB) for 2021/2022, down 57% from the previous week and 40% from the prior 4-week average.

The report, however, showed increases primarily to China of 174,500 RB, following strong sales data to the top consumer in the prior week as well.

Analysts have noted that at these price levels mills are forced to ration the use of natural fiber cotton, which cannot compete with far lower polyester prices.

Total futures market volume fell by 38,117 to 33,674 lots. Data showed total open interest fell 1,658 to 289,200 contracts in the previous session.