NEW YORK May 16 Cotton futures fell below 90
cents per lb for the first time in three weeks on Friday,
breaking a key support level and notching up its biggest weekly
loss in over a month, as speculative investors continued to
liquidate bullish bets.
Sell stops were also triggered after piercing the 90-cent
mark, with weak import data from China, the world's biggest
textile market, reinforcing concerns about waning demand as
Beijing overhauls its stockpiling policy.
The most-active July cotton contract on ICE Futures U.S.
closed down 0.6 percent at 89.82 cents a lb. Prices had
been above 90 cents since April 23.
Halfway through the month, prices were on track for their
first monthly low since October last year.
Speculative investors have pulled more bullish bets from the
fiber market, Friday's data showed, reversing a months-long
inflow of cash as speculators bet on tightening supplies.
Any further long liquidation may be cushioned by trade short
covering, traders said.
"There should be plenty of trade shorts waiting in the
wings, ready to absorb anything the specs throw at them," Peter
Egli, director of risk management for British merchant Plexus
Cotton Ltd, said in a report.
"We may therefore see some choppy trading action in the days
With twice as many trade shorts as there are spec longs, he
said he expects the market to hold any selloff in the 87-89
(Reporting by Josephine Mason; Editing by James Dalgleish)