NEW YORK (Dow Jones)--Cotton prices stretched lower Monday as weather
conditions heightened expectations for a bountiful U.S. fall harvest.

Nearby cotton for October delivery ended 0.99 cent, or 1%, lower, at 77.16
cents a pound on ICE Futures U.S. The most actively traded December contract
settled 1.20 cent, or 2%, lower, at 73.97 cents a pound.

Cotton prices have fallen 3.4% since June 30, the same day the U.S.
Department of Agriculture boosted its outlook for planted U.S. cotton acres by
nearly 40%. Last week, the USDA lifted by 50% its outlook for U.S. cotton
production, which will hit the market in the fall. The U.S. is the world's top
cotton exporter and the No. 3 producer. Producers planted more of the crop as
prices were driven higher by the textile demand that followed the rebounding
world economy.

Now favorable weather forecasts are pressuring cotton prices, said Jack
Scoville, vice president at Price Futures Group in Chicago. The weather will
promote development of the crop, which could raise yields and overall
production.

In the Southeast, conditions are mostly favorable for developing cotton,
private forecaster Meteorlogix said. More rain would benefit the developing
crop through the Mississippi River Delta states. In the Southwest, Meteorlogix
said warmer, drier weather is now needed across West Texas. The region is the
top production area in the U.S. Beneficial rains there have pressured futures
prices in recent weeks.

December cotton prices could fall toward the 69 cents to 71 cents range in
coming weeks, said Sharon Johnson, senior cotton analyst at First Capitol Group
in Atlanta.

Cotton felt spillover pressure in tandem with commodities like crude, metals
and Chicago Board of Trade grains. Traders sold those contracts in favor of the
safe-haven dollar. Uncertainty in front of second-quarter 2010 earnings, as
well as the results of European bank stress tests, sparked the flight. A
stronger dollar also makes those commodities more costly in other currencies.

Volume through 2:30 p.m. EDT was estimated 11,975 lots. In options,
approximately 7,360 calls and 1,804 puts traded, according to exchange data.

ICE daily cotton stocks decreased by 12,501 500-pound bales Friday, to total
217,358, with 9,971 decertification orders, according to exchange data.

ICE cotton open interest--the number of active positions left at the end of
the session--decreased by 2,261 positions Friday to total 155,903, according to
the exchange.

Close Change Range
Oct 77.16 -0.99 76.84-77.54
Dec 73.79 -1.20 73.56-74.95
Mar 74.94 -1.17 74.80-75.78