NEW YORK: ICE cotton futures tumbled as much as 4.6% to trade limit down on Monday, pressured by a drop in grains market after weather in the US Midwest region turned favourable.

Cotton contracts for December were down 1.79 cent, or 2%, at 86.13 cents per lb, by 12:00 p.m. EDT (1600 GMT), after dropping as much as 4 cents to its lowest since June 1 at 83.92 cents.

Intercontinental Exchange Inc has set the daily price limit for all Cotton No. 2 futures delivery months trading upwards of 80.01 to 110.00 cents per pound at 4 cents above and below the prior day settlement price.

“It’s mainly a influence from the grains, the weather forecast has somewhat shifted in the Midwest, so corn and beans and wheat were all decisively lower, which influenced cotton to trade down,” said Keith Brown, principal at cotton brokers Keith Brown in Georgia.

“After experiencing those good US Department of Agriculture (USDA) numbers last week and sharply rallying, people got spooked, scared and just sold out,” Brown said, adding “the market will recover, but then it’ll go sideways for a while until the acreage numbers come out.”

The natural fibre gained 2.4% last week, registering a fourth consecutive weekly gain.

Chicago corn futures fell over 2%, while soyabeans and wheat were also down sharply.

“The market’s overbought condition, speculator profit-taking ahead of the June 30 acreage report, and producer selling seem likely contributing factors,” Louis Rose, director of research and analytics at Tennessee-based Rose Commodity Group said in a note.

Market participants now await the month-end acreage report for clarity on the production estimate for the US 2021/22 crop.

Meanwhile, speculators raised net long positions in cotton futures by 4,057 contracts to 48,299 in week to June 8, data showed on Friday.