NEW YORK (Dow Jones)--Cotton prices fell Thursday as widespread fund risk
aversion kicked many commodities and equities lower and tripped preset sell
signals on technical charts.

Nearby cotton for July delivery settled 1.19 cent, or 1%, lower at 82.09
cents a pound on ICE Futures U.S.

Cotton prices held in a narrow band from 80 cents to 82.50 for the last two
weeks until getting a boost Wednesday from talk of strong buying from China,
the world's top cotton importer. Prices are nearly 45% higher than at the same
time last year as dwindling world stocks meet rebounding textile demand as the
world economy recovers.

However, those economic outlooks are being shaken by uncertainty regarding
Europe's action toward Greece's sovereign-debt issues. Traders sold many
markets ahead of a European-debt aid vote expected Friday from Germany.

Cotton prices took losses Thursday along with most metals, crude and
equities.

"The selling appears to be speculative and associated with the Greek
situation that is rattling the entire investment world," said Mike Stevens, an
independent cotton broker and analyst based in Mandeville, La. "All markets are
in a defensive capital-preservation mode."

More selling hit cotton when the market pushed below 82.50, Stevens said.
Falling past that previous sticking point indicates to technical traders that
more weakness is likely. Traders then sold to avoid subsequent losses.

The next support level for July cotton is at 81.50 to 81.90, with key support
at 80 cents a pound, said Tom Mikulski, a senior market strategist at
Lind-Waldock in Chicago.

Despite those losses, continued demand from China showed up in weekly U.S.
export sales data Thursday. Net U.S. cotton sales totaled 244,400 bales in the
week to May 13, U.S. Department of Agriculture data show. Though slightly lower
than the previous week, more than half of total sales came from China. The U.S.
is the world's top cotton exporter. Supplies are tight until the fall, when the
cotton crop currently being planted in the northern hemisphere is harvested.

ICE daily cotton stocks increased by 1,570 500-pound bales Wednesday to total
1.064 with 25,377 bales awaiting review and 885 decertification orders,
according to exchange data.

ICE cotton open interest--the number of active positions left at the end of
the session--increased by 4,873 positions Wednesday to total 189,135, according
to the exchange.

Cotton volume for the session to the settlement was estimated at 16,771 lots,
according to exchange data. In options, approximately 2,224 calls and 2,851
puts traded on the floor.

Close Change Range
Jly 82.09 -1.19 81.45-83.40
Oct 77.85 -0.41 76.67-78.50
Dec 76.95 -1.16 76.38-78.15