NEW YORK, July 13: NY cotton futures fell on Friday on speculator and industry selling as the market reversed course amid technical weakness after a sluggish start to trading, market sources said.

Cotton prices lost ground after a rally toward 50 cents a lb in the key December contract on Thursday faltered and futures then closed technically weak below Wednesday’s lows.

This week, we made new highs and we have closed below last week’s lows, so you also have a classic key reversal on a weekly basis that’s extraordinarily bearish, Sharon Johnson, cotton expert at Frank Schneider and Co. in Atlanta, said.

Traders said the market did not seem particularly riled by more losses in US equities on Friday, however, as it tended to trade this week on its own technical indicators.

Benchmark December cotton futures settled at 46.30 cents a lb, down 1.45 cents, after ranging from 48.00-46.25 cents. Other delivery months slumped between 1.28-1.48 cents.

Mike Stevens of Swiss Financial Services in Mandeville, Louisiana, said speculative sales and options-related dealings pummeled cotton near midday, triggering waiting stop-loss sell orders.

Analysts have said the market has seen stronger demand for cotton since prices sank in October 2001 to a 29-year low near 28 cents, and futures still could yet bobble higher in the near-term.

Trade buying should be stout on a scale-down basis, both for mill fixations and for export sales, and that should limit losses, Brokers Flanagan Trading Corp. in North Carolina said.

USDA this week in its monthly supply/demand report raised world ending cotton stocks for 2002/03 to 41.18 million (480-lb) bales from 40.72 million bales last month.

It lowered its estimate for US cotton output in 2002/03 to 17.5 million bales from 17.8 million.

Traders peg resistance in the NYCE December contract at 48.20, 49.50 and 50 and 50.50 cents, with support at 46.00 cents and 45.35 cents.

Open interest in the cotton market rose 240 lots to 77,330 lots as of July 11.—Reuters