NEW YORK, Sept 14: NY cotton futures closed on Friday near its lows on steady speculative pressure after slipping below key technical support levels, and operators feel fiber prices may trek lower in the coming days and weeks.

December cotton eased 0.32 cent to finish at 43.17 49 cents a lb, trading 43.05-43.70 cents. Except for one contract, the rest were flat to 0.46 cent softer.

We’re eating through the trade buying (in the market), said Sharon Johnson, cotton expert for Frank Schneider and Co. Inc. in Atlanta. Ultimately, we’re looking at 40 cents.

With certificated stocks rising and export demand for US fiber lagging, cotton broke down in the previous session as it crashed through the lower end of its 44-50 cents trading band, a range that has held for the past three months.

Futures declined despite what is seen as a friendly USDA monthly supply/demand report and a weekly USDA export sales data which showed net upland cotton sales for the week at a marketing-year high.

More speculative pressure is seen building up in downside stops and those holding put positions in December may eventually pound futures, brokers said.

Market analyst O.A. Cleveland said the December contract will most likely hold between 40-46 cents.

He said the failure of the contract to hold 44 cents meant this now projects December to the 40-cents level.

Speculative fund pressure kept cotton under the gun from the onset of business although scale-down trade support again sought to cushion the market’s fall, floor sources said.

Trade buying managed to hold the market above 43 cents, basis December, but most dealers feel the festering issue of ballooning certificated cotton stocks and weak exports will eventually push prices lower.

Adding to the bearish gloom is the fact the US cotton harvest is expected to get under way soon.

The situation is set up for another October swoon for the cotton market. In October 2001, the market crashed to a 29-year low at 28.20 cents, basis the then front December cotton contract.

While futures may not go down that low, the overall weakness of the market is palpable, analysts said.

Technicians said December would need to surmount resistance at 43.80/85 cents and the next area of support the contract is looking at would be at 42.40 and 41.80 cents.

Floor dealers said estimated final volume touched 12,000 lots, from the previous count of 21,170 lots. Open interest in the cotton market fell 708 to 69,621 lots as of September 12.—Reuters