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NY cotton ends softer in line with weak markets
March 20, 2012 / 7:12 PM / 6 years ago

NY cotton ends softer in line with weak markets

* Lower stock markets, crude oil weigh
    * Mill buying pares losses in cotton

    NEW YORK, March 20 (Reuters) - Cotton futures settled easier
on Tuesday on investor and speculative sales as weakness in
outside markets kept fiber contracts on the defensive in an
otherwise rangebound session, analysts said.	
    The benchmark May contract on ICE Futures U.S. lost
1.18 cents or 1.1 percent to conclude at 87.90 cents per lb,
dealing from 87.43 to 89.10 cents. 	
    Volume traded on Tuesday came to slightly more than 18,200
lots, about a quarter below the 30-day norm, Thomson Reuters
data showed.	
    "I think the selling is in sympathy with everything else,"
said Mike Stevens, an independent cotton analyst in Louisiana.	
    Fresh concerns about China's economic growth weighed on
global stock markets, while oil fell more than 1 percent on
expectations Saudi Arabia would act to stem any rise in crude
prices that could hurt the world economy. 	
    Technically, the inability of the May contract to get past
its 20-day moving average at 89.17 cents pressured the market,
analysts said.	
    Open interest - an indicator of investor exposure - in
cotton rose for a ninth straight session to 186,108 lots as of
March 19, the highest since Feb. 15, ICE Futures U.S. data
    Investors appear to be expanding short positions in cotton,
betting prices will fall further due to bearish fundamentals,
traders said.	
    The U.S. Commodity Futures Trading Commission said net short
positions in the cotton market stood at 7,553 lots, against a
net long position of more than 14,000 lots at the start of
    The bearish outlook for cotton was emphasized by the U.S.
Agriculture Department's monthly supply report, which raised its
world 2011/12 cotton production forecast to 123.64 million
480-lb bales from 123.34 million, and cut its projection of
world consumption to 108.72 million bales from 109.71 million. 	
    It raised its forecast of world end-of-season stocks to
62.32 million bales from 60.77 million. The 2011/12 marketing
year ends on July 31. 	
 (Reporting by Rene Pastor; Editing by Dale Hudson)

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