Cotton futures sank 2 percent on Friday and touched a more than ten-month low, weighed by supply pressures, demand worries, and long liquidation. The most-active March cotton contract on ICE Futures US was down 1.58 cent, or 2 percent, at 76.77 cents a lb by 10:54 am EST (1554 GMT), the weakest level since January.
"Open interest is declining, harvest pressure is coming in, and the inevitability of the dam bursting is weighing on the market," said Jordan Lea, chairman and co-owner of Eastern Trading in South Carolina, referring to expectations that China's reserve auctions may begin soon. Worries continued to plague the market that Beijing will flood its domestic market with supplies and crimp import demand in the world's top consumer.