October 26, 2001	Friday	Shaba'an 8, 1422

NEW YORK, Oct 25: NY cotton futures reeled from speculative and local sales to end near a 30-year trough on Wednesday as the weight of abundant supplies, soft demand and a recession induced by the Sept. 11, attacks continued to prove too heavy for the market to bear.

The tone is definitely weak. There’s no way to get around it, said Sharon Johnson, cotton specialist of Frank Schneider and Co. Inc. in Atlanta.

December cotton tumbled 0.67 cent, or by 2.25 per cent in value, to close at 29.09 cents a lb, trading from 29.49 to a new lifetime nadir of 28.91 cents.

Market operators said it was the lowest close for cotton prices since ending around 26 cents in 1972.

March dove to a new low of 30.60 cents before concluding the day at 30.75 cents, down 0.66 cent.

Almost all of the back months set new lifetime lows, with losses eventually ranging from 0.57-0.65 cent.

Cotton futures slid from the start, piercing the 29.50 cents level last seen in 1986 and quickly sinking to an area last visited by the market in 1972.

Brokers said speculative and local pressure deflated cotton, with some analysts saying that trade pressure may have also been present due to talk of cancellations in sales from overseas customers.

This takes us to near 30-year lows, Mike Stevens of Swiss Financial Services in Mandeville, Louisiana, said.

Nobody has any reason to step up to the plate and buy cotton, added Johnson.

Traders said the ever weakening tone of cotton may have also been caused in part by expectations that monthly annualized cotton consumption figures due out Thursday from the US Census Bureau may again be weak.

Stevens had earlier said US domestic cotton usage may have even slipped just a little more from the 7.89 million (480-lb bale) annualized rate reported for August.

In its October monthly production report, USDA forecast US cotton consumption in 2001/02 at 8.3 million bales.

Another negative factor for the cotton market was a further deterioration in the Cotlook A Index used by the trade as an indicator of global cotton demand.

The A Index fell 0.15 cent to trade Wednesday at 35.95 cents.

Technicians said support for the December cotton contract would now be at 28.50 and 28 cents. Resistance in the contract was forecast at 30 and 30.50 cents.

Floor dealers estimated final volume traded at some 10,000 lots, compared with the previous tally of 5,319 lots. Some dealers believe the actual volume traded was closer to 6,000 lots.—Reuters