NEW YORK (Dow Jones)--Cotton prices ended lower Tuesday as traders took
profits at two-year highs while awaiting fresh fundamental news for trading
cues.

Most-active May cotton settled down 144 points, or 1.75% at 81.85 cents a
pound.

Despite the session's losses, the contract is still nearly 20% higher since
Feb. 5. Bullish sentiment has driven cotton prices higher since mid-2009 as
weaker-than-expected production met growing demand. Futures got an extra boost
this week from projections cotton would hit $1 a pound, according to Joe
Nicosia, chief executive at a leading merchant, Allenberg Cotton Co., a
division of Louis Dreyfus Commodities. Prices reached their highest levels in
two years on a weekly basis Monday.

But futures eased Tuesday as traders sold near Monday's highs, analysts said.

Traders are reluctant to buy at such high levels after that rapid, steep
climb, said John Flanagan, president of Flanagan Trading in Fuquay-Varina, N.C.
May cotton will likely probe the 79-80-cent level for support, Flanagan said.

Cotton will need more momentum if prices are to rise, said Keith Brown,
principal of Keith Brown & Co. in Moultrie, Ga.

"You have to feed a bull everyday, and a bull market has to eat everyday,"
Brown said.

The next chance for that will be Thursday's weekly U.S. cotton export sales
report. One week later, the U.S. Department of Agriculture will release monthly
supply-and-demand projections.

Cotton prices found firm footing for the February rally following last
month's USDA report. The report anticipated world cotton production would fall
12.4% short of demand in the August-July crop year. The same data added another
9% to the outlook for U.S. cotton exports and cut estimates for available
cotton stocks by 23.25% in the U.S.

The U.S. is the world's top cotton exporter. Overseas cotton mills,
particularly in China, import U.S. cotton to produce yarn and textiles.
However, analysts said mills may be reluctant to buy at such high prices, which
would trigger more selling from speculators.

ICE daily cotton stocks increased by 2,318 500-pound bales Monday to total
559,164 bales with 74,979 bales awaiting review, according to exchange data.

ICE cotton open interest – the number of active positions left at the
end of the session - increased by 1,235 positions Monday to total 175,007,
according to the exchange.

Volume was estimated at 22,626 lots. In options, approximately 7,898 calls
and 6,000 puts traded, according to exchange data.

Close Change Range
Mar 81.90 -154 pts 81.00-84.11
May 81.85 -144 pts 80.66-83.17
Dec 74.10 - 56 pts 73.25-74.70