NEW YORK, Aug 16: NYCE cotton futures settled in a two-month trough on Friday, pressured in extremely thin trading by speculative selling and pre-weekend liquidation, dealers said.

Benchmark December cotton fell 0.33 cent to 55.83 cents a lb, after trading from 56.45 to 55.65 cents, the lowest level for futures since June 10. Next-active March lost 0.30 cents to 58.30 cents.

Other months shed 0.10-0.28 cents.

Market conditions were exceptionally light in New York cotton because of the massive power failure that hit the US East and parts of Canada on Thursday and kept many players from arriving at the exchange on Friday.

“It’s very thin out there. Hardly any traders are in and there’s no participation,” said one floor broker, adding that a lot of floor personnel did not make it to the exchange on Friday morning.

“It is pre-weekend and getting-out of positions,” he said.

In cotton, analysts said speculative positioning was driving futures this week as international cotton mills largely stayed sidelined, while the domestic mill industry was also out of the market, plagued by recent closures.

“Scale down merchant buying, in anticipation of excellent demand on the horizon, is providing support and preventing a free fall to 55 cents. Longer term, based squarely on foreign demand, 2003 crop year prices will improve,” the weekly outlook by O.A. Cleveland said.

Some players believe funds could force prices lower, however, due to a lack of trading volume and thin interest in the market.

Flanagan Trading Corp. in a daily market report pegged support in NYCE December cotton at 55.50 cents and 54.84 cents, with resistance at 56.60 and 57.10 cents.

Final estimated volume was 4,000 contracts, versus Thursday official count of 4,072 lots. Open interest was down 29 at 60,828 lots as of Aug. 14.—Reuters