Cotton futures dropped more than 1 percent on Thursday, retreating from their previous session's one-month high, as forecasts of rain in the dry and hot US Southwest and Southeast growing regions eased supply worries. The benchmark December cotton contract on ICE Futures US closed down 0.88 cent, or 1.3 percent, at 66.58 cents a lb.
-- Technical selling could limit gains
-- India could see more monsoon rain: forecasters
"There is a very good chance West Texas could receive rain today and Georgia could also get some rain this weekend," said Keith Brown, a broker at Georgia-based Keith Brown & Co. Also weighing on cotton futures were forecasts that India's monsoon is expected to provide more rain next week, aiding crops in north-west and central growing areas.
Traders said the market largely ignored encouraging weekly US upland cotton export data earlier Thursday. Technical selling could pressure fibre, as the December contract has not broken its 50-day moving average at about 68 cents a lb since May, traders said. Cotton prices are on track for a 6 percent gain in August after hitting a near five-year low of 62.02 cents a lb at the start of the month.