Dec. 22 (Bloomberg) -- Cotton tumbled the most allowed by ICE Futures U.S. on bets that demand will ebb after prices more than doubled this year to a record.

Export sales of upland cotton by the U.S., the world’s biggest shipper, dropped 35 percent in the week ended Dec. 9 from a week earlier, Department of Agriculture data showed. The 14-day relative-strength index, a gauge of price momentum, was above 70 in the three previous sessions, indicating prices were poised to drop.

“The market has been overbought,” said Scott Joss, the president of ClearTrade Inc. in Chicago. Prices at current levels may curb exports, he said.

Cotton futures for March delivery fell by the exchange limit of 5 cents, or 3.1 percent, to close at $1.5412 a pound at 2:36 p.m. in New York, the biggest drop since Nov. 26. The price reached a record $1.5912 yesterday.

Inventories held in warehouses monitored by ICE have climbed for five straight sessions to the highest level since July 15.

“It’s emotional,” Joss said. “I won’t be surprised to see another day of ‘limit down’ tomorrow.”

Prices may fall to $1.27 by the end of the year before rebounding, he said. Futures closed up by the daily exchange limit in the previous three sessions.

Cotton is heading for the biggest annual gain since 1973 after global supplies failed to keep pace with rising demand from China, the largest consumer.