* Fall past technical support triggers automatic selling
* Cotton down 4.5 pct over last 3 sessions
* Speculators boosted cotton 18 pct during first quarter
NEW YORK, April 8 ICE cotton fell 1.6 percent on
Monday, with investors seen taking profits as prices fell below
technical support and mills hesitant to buy as prices touched a
one-month low and notched the largest three-session slide since
The most-active May cotton contract on ICE Futures U.S.
fell 1.41 cents, or 1.6 percent, to settle at 85.38 cents
per pound. The session low was 85.22 cents, the lowest level
since early March.
Cotton has dropped nearly 4.5 percent over the last three
sessions, as prices fell past technical support levels and
triggered more selling.
Automatic sell orders kicked in when cotton fell past a
recent low of 86.12 cents a lb. On Friday, prices settled below
the low point of a flag formation at 86.59 cents a lb.
Last week, cotton fell below a technical support level at
the 14-day moving average, which dealers said prompted further
selling this week.
During the first quarter, cotton rose 18 percent as
speculators invested in the fiber, but the upward momentum has
stalled since last month, when prices climbed to a one-year high
of 93.93 cents.
The noncommercial dealers still hold a large bullish stance
in cotton futures and options, though they have dialed that
position back from a five-year high seen last month, according
to government data.
"You've got outright selling and limited, scaled-down
buying. The mills will wait for evidence of some sort of a low
before buying," Knight Capital's cotton specialist Sharon
Demand and strong prices in the cash market had been
supporting cotton's recent rally, with recent sale and shipment
levels being seen as strong.
Traders pegged physical support for the futures market in
the 83-to 85- cent range and technical support at around 81
Prices felt further selling pressure amid the index fund
roll on Monday, as open interest moved out of the spot contract.
The July contract closed down 1.31 cents, or 1.5
percent, at 87.26 cents a lb.
The U.S. Department of Agriculture is set to release its
monthly crop report on Wednesday. Last month, prices rose after
the agency cut its forecast for global stocks, citing higher
The world is forecast to see a record global surplus by the
end of the crop year through July.
Prior to its 2013 gains, fiber posted two years of losses as
lower-priced alternatives eroded demand for fiber and global
(Reporting by Chris Prentice; Editing by David Gregorio)