NEW YORK (Dow Jones)--Cotton prices sagged Monday as weakening demand cues
added to technical selling sparked by recent losses.

Nearby cotton for May delivery settled 0.90 cent, or 1%, lower at 81.86 cents
a pound on ICE Futures U.S. The most-active July contract also ended 0.90 cent,
or 1%, lower at 83.23 cents.

Cotton prices have eased from two-year highs hit on April 26 as market cues
indicate that the tight world supplies and strong demand that drove the rally
may be backing off. Weekly U.S. cotton export sales data released last week was
lackluster. This adds to uncertainty uncovered when May cotton delivery began.
ICE cotton stocks switched hands from merchant to merchant, indicating the
overseas market was not as strong as previously anticipated. A major merchant
took delivery of the so-called ICE certificated stock in the March delivery
period, and handed it off to others, analysts said.

"[July futures are] still smarting from all of these deliveries," said Keith
Brown, principal of Keith Brown & Co. in Moultrie, Ga. "People are starting to
dissect that."

July prices slid to 83 cents Thursday, breaking near-term support at 84
cents, said Jack Scoville, vice president at Price Futures Group in Chicago.
That move indicates the market may not be as strong as previously thought.

July cotton has support at 82 cents and 83 cents, Brown said.

December contracts are taking fewer losses than July as traders sell the
latter at a premium. December futures are weaker than July on expectations that
U.S. cotton producers will plant 15% more cotton in 2010 than the year before.
Forecasts for the extra supply weighs on the outlook for prices. High futures
prices in the run-up to planting season are likely to encourage more seedings.

Storms in the northern part of the Mississippi Delta region, including parts
of Tennessee, Mississippi and Arkansas, haven't done apparent damage to the
cotton crop, Scoville noted. The U.S. crop is in the early stages of planting
in the Delta and Southeast.

ICE daily cotton stocks increased by 1,625 500-pound bales Friday to 1.02
million bales, with 30,193 bales awaiting review and eight decertification
orders, according to exchange data.

ICE cotton open interest--the number of active positions left at the end of
the session--decreased by 10 positions Friday to total 190,005, according to
the exchange.

Volume was estimated 11,159 lots. In options, approximately 3,854 calls and
2,833 puts traded on the floor, according to exchange data.

Close Change Range
May 81.86 -0.90c 81.81-82.93
Jly 83.23 -0.90c 83.12-84.30
Dec 77.89 -0.08c 77.57-77.99