NEW YORK (Dow Jones)--Spillover weakness pulled ICE Futures U.S. cotton lower
Friday amid proposals to tighten banking regulations.

March cotton settled down 78 points, or 1%, at 71.07 cents a pound and the
May contract settled 75 points lower at 71.31.

Uncertainty about banking regulations led to speculative selling in
commodities amid equities losses, analysts said. President Barack Obama
proposed Thursday to streamline the U.S. banking system, which sent the dollar
and equities into a tailspin. Chicago Board of Trade grains also settled lower,
and most metals and crude were also down.

March cotton will be stuck in a tight 70.59-72 range in the near term, said
Tom Mikulski, senior market strategist at Lind-Waldock in Chicago. The move
could crimp liquidity, Mikulski said.

Cotton futures are backing off of a late 2009 rally built on tighter world
supplies and growing consumption.

"Although the current correction may still have a little further to go, old
crop futures will sooner or later resume their uptrend and trade to new highs,"
said Peter Egli, director of risk management at Plexus Cotton Ltd. in Phoenix.

ICE daily cotton stocks increased by 6,117 500-pound bales Thursday to total
443,898 bales with 443,898 bales awaiting review and 1,056 decertification
orders, according to exchange data.

ICE cotton open interest-–the number of active positions left at the
end of the session--decreased by 332 positions Thursday to total 173,626,
according to the exchange.

Volume was estimated 11,673 lots. In options, approximately 4,276 calls and
2,749 puts traded, according to exchange data.

Close Change Range
Mar 71.07 -78 pts 70.98-71.95
May 72.31 -75 pts 72.20-71.95
Dec 72.92 -63 pts 72.66-73.45