Cotton Futures Fell, Hitting A 15 Year High

Keith Brown and Co. manager Keith Brown said, "the market is losing its upward force.

"Today's cotton fall is quite reasonable, and the market outlook will be very healthy."

The analyst said cotton futures support in the short term is 95 cents per pound.

Benchmark cotton futures contracts fell 1.17 cents to 99.62 U.S. dollars per pound in December, hitting a 15 year high of 1.0334 dollars per pound and a low intraday low of 99.55 dollars.

Investment funds and factories

Analysts said that most of the recent increase in the market was driven by speculative fund buying, because they believed that if the weather in China, India and the United States and other major producing countries were bad, the cotton production would be affected, the price of cotton futures would rise further, and some factories were buying.

"Overseas cotton factories are buying," said Lou Barbera, an analyst at VIP Commodities.

"Although some funds are taking advantage of the price being at a high level, the new bulls are entering."

Cotton futures volume is estimated to be 25283 hands, while the 30 day average is 15071 hands.

Analysts are not sure whether the market has reached the top.

Bulls believe that investment fund purchases and overseas purchases continue to boost cotton futures, while bears believe that the upcoming US cotton harvest and India export cotton materials will inhibit market growth.

Market participants will be concerned about the US Department of agriculture's export sales report to be released on Thursday to determine whether the recent rally will affect US cotton exports.

Market analysts estimate that last week, the United States estimated sales of cotton exports between 300000-400000 packages, compared with 844200 last week.