The New York Board of Trade's key December cotton contract dove 2.63 cents or 4.8 percent to finish at 52.13 cents a lb, trading between 52.10 and 54.10 cents. It was the lowest close for the contract since late last month when it traded just under 52 cents.
March slumped 2.54 cents to 54.36 cents. Back months declined from 0.75 cent to 2.80 cents. Keith Brown, president of commodity trading firm Keith Brown and Co in Moultrie, Georgia, said disappointment over the weekly export sales report by the US Department of Agriculture dampened sentiment from the opening bell.
USDA said US cotton sales amounted to 152,600 running bales (RBs, 500-lbs each), against trade belief it would range from 100,000 to 250,000 RBs. US cotton shipments fell to a marketing year low of 107,600 RBs.
Brown said "superior weather across the (US) cotton belt" meant supplies are building up but export sales seem to be weakening over the past few weeks and casting a negative pall over fiber contracts.
"The slow pace of sales and shipments will need to pick up quickly to meet expectations," said a daily commentary by brokers Flanagan Trading Corp.
The USDA has forecast US cotton exports in 2005/06 at 16 million (480-lb) bales, up from last month's forecast of 15.3 million.
Mike Stevens, an analyst for brokers SFS Futures in Mandeville, Louisiana, said the inability of December to hold the area between 52.80 and 53 cents deflated futures.
Analysts said they were particularly worried if cotton demand in China, the world's biggest fiber consumer, slows down.
Brown said the benchmark December cotton contract, which has been dealing in a band from 52 to 55 cents, could track lower in the weeks ahead and may test a low of 47.76 cents reached last August.
Traders put resistance in the December cotton contract at 52.50 and 53.05 cents, with support at 52 cents.
Floor dealers said estimated final volume amounted to 27,000 lots, up from Wednesday's tally of 8,886 lots. Open interest rose 181 lots to 123,000 contracts as of October 26.