NEW YORK: Cotton futures fell on Friday, skidding to a second straight weekly loss, on concern over demand in top consumer China after a string of volatile trading sessions that lifted prices to six-month highs.
The most-active May cotton contract on ICE Futures U.S. closed down 0.67 cent, or 0.8 percent, at 87.14 cents a lb.
Prices retreated from Monday's rally to a six-month high of 90.44 cents a lb as speculators have liquidated long positions.
Cotton prices in New York were under pressure after Chinese cotton futures fell on talk that the state reserves may lower its selling price for bales, which would boost supplies of lower-priced cotton in the market.
The Chinese yuan suffered a record weekly loss, adding to the worries over fiber demand in the world's top textile market.
Weekly U.S. government sales data showed that U.S. exporters shipped 27,100 bales of cotton in the most recent reporting week, down 87 percent from the prior four-week average as buyers in China, Turkey, and Korea canceled bales.
“People are worried a bit about the demand, which did tail off," said Jack Scoville, a vice president for Price Futures Group in Chicago.
Even so, tight supplies in the United States, the world's top exporter, and mill fixations underpinned the market.
Speculators cut their net long position in cotton futures and options in the week ended Feb. 25, weekly U.S. government data showed on Friday.
So far 62 lots, or about 6,200 bales, were issued for delivery against the March cotton contract in the first week of the notice period, ICE data showed on Friday.
Exchange stocks totaled almost 257,200 bales on Thursday, up about 1,700 bales from the previous day and at the highest level since July, according to the most recent ICE data compiled by Reuters.