NEW YORK, Sept 27: Cotton futures closed sharply lower Friday on investor liquidation and the market’s next move will depend greatly on whether a bank bailout deal will be reached in the US Congress this weekend, brokers said.

The benchmark December cotton contract fell 1.28 cents to close at 60.38 cents per lb, trading from 60.20 to 61.60 cents. March lost 1.30 cents to 64.90 cents.

Volume traded in the December contract stood at 6,099 lots at 2:33 p.m. (1833 GMT).

If we get this stuff done before the Asian markets open, there’s a chance this market can right itself, said Mike Stevens, an analyst for brokers SFS Futures in Mandeville, Louisiana.

The inability to craft a deal proposed by the Bush administration that will be approved by other members of the Republican Party sparked liquidation in cotton, dealers said.

The $700 billion plan was aimed at stopping the rout in financial markets and head off the world’s worst financial crisis since the 1929 Great Depression.

Analysts said the market is not even trading the fundamentals of the cotton market.The fall cotton harvest is getting under way and some in the trade are wondering if supplies will get tighter or demand will suffer in the 2008/09 marketing year (August/July).

The outlook for that will emerge in the next monthly supply/demand report from the US Agriculture Department which is due out on October 10.

Otherwise, Stevens said trading in the market doesn’t have anything to do with the cotton market.--Reuters