* Failure to hold above 10-day moving average triggers
selling
* Weak equities, grains weigh on agricultural commodities
NEW YORK, Aug 13 (Reuters) - Cotton sank nearly 2 percent on
Monday as technical selling and a gloomy global demand outlook
extended the previous session's sharp selloff after the U.S.
government raised its forecast for global cotton stockpiles to
an all-time high.
Analysts said weakness in U.S. equities and many commodities
stirred demand worries among cotton investors. Data released
Monday showed Japan's economy expanded just 0.3 percent in
April-June, half the pace expected, raising doubts about the
strength of a global economic recovery.
"The market began to technically come under additional
pressure as the day progressed as it was unable to trade above
its 10-day moving average at 73.46 cents. Staying below it
turned the short-term trend negative," said Sharon Johnson at
Knight Futures.
The benchmark December cotton contract on ICE Futures
U.S. fell 1.33 cents, or 1.8 percent, to settle at 71.69 cents
per lb, close to its intraday low of 71.59 cents.
Losses in grains led by soybean futures also dragged the
entire agricultural-commodities sector lower, as improving
weather in the U.S. Midwest crop belt brightened crop prospects
and helped trigger a round of fund long liquidation.
Cotton prices sank nearly 4 percent on Friday as the U.S.
Department of Agriculture's (USDA) new ending-stocks estimate of
74.67 million 480-lb bales hit a new record, beating the
previous high set last season by 10 percent.