Limit down

It may need more than firm US export data to revive the cottonmarket, with New York futures in the fibre tumbling 1.8% to 72.22 cents a pound for December delivery, taking the contract back below its 10-day moving average.

The drop followed a fall in futures on China's Zhengzhou exchange, where a settlement down 1.9% at 15,315 yuan a tonne for January delivery underplayed the drama of the session.

Earlier, the contract hit limit down of 14,830 yuan a tonne, a slump of 5.0%.

The reason behind the plunge in Chinese futures is not clear, although a Reuters report early on Thursday did highlight concerns that higher prices of cotton from government auction, to 15,201 yuan a tonne on Wednesday, were quelling demand.

"The rise in cotton prices can't be passed downstream, leading to some companies being forced to limit or stop production," the China Cotton Association said.

'Large sell order'

CBA's Tobin Gorey also noted an improved weather outlook for India, the top cotton producing country.

"Forecasters say Gujarat, India's top cotton producing region, will experience a significant step up in rainfall over the next fortnight.

"The rainfall will improve marginal soil moisture conditions in the region."

He also noted ideas that the US market was in the last session "hit by a large sell order right at the close".