Cotton futures that rallied as much as 10 percent this month are headed to the lowest price since June, after erasing all those gains, according to a technical analysis by KCG Futures.

Since reaching a five-month high of 93.72 cents a pound on Aug. 16, prices plunged as much as 11 percent on ICE Futures U.S. in New York. On Aug. 21, the contract for December delivery dropped below 84.55 cents, the 23.6 percent Fibonacci retracement from this monthΆs high, signaling further declines, said Sharon Johnson, a senior market specialist at KCG Futures.

“Since we have retraced more than three quarters of the run-up from June, the technicals would suggest that youΆre more likely to see a complete retracement” to 81.72 cents, Johnson said in a telephone interview from Roswell, Georgia. “We should take out 80 cents,” which would be the lowest for a most-active contract since June 3, she said.

Global production will exceed demand for a fourth straight year in the 12 months that began Aug. 1, expanding the record global surplus, the U.S. Department of Agriculture said Aug. 12. Prices had rallied earlier this year on concern that production is dropping in the U.S., the largest exporter, and that China would continue to expand government stockpiles.

On Aug. 12, the USDA forecast a 46 percent drop in Chinese imports. The agency said on Aug. 26 that crop conditions improved last week, with 47 percent of the crop in good or excellent condition, up from 46 percent a week earlier. Futures slumped 9.9 percent last week, the biggest plunge since May 2012.

In technical analysis, investors and analysts study charts of trading patterns and prices to predict changes in a security, commodity, currency or index. Fibonacci analysis is based on the theory that securities tend to rise or fall by specific percentages after reaching a high or low.