Slowdown expected in U.S. export sales. Special cotton auction set in China. Rapid planting progress reported in India. Fed announced cut in bond buying.

Cotton futures fell to yet another new contract low and new low close Wednesday after posting the session high on the overnight opening.

Benchmark December closed down 101 points to 64 cents, in the lower quarter of its 149-point range from up 24 points to 65.25 to down 125 points to 63.76 cents. This was its second new contract low close in a row and the third new intraday contract low in the last five sessions.

December had successfully tested on Tuesday the intraday contract low of Friday but had closed at a new contract low finish below MondayΆs low. Its inability to generate follow-through on the slight early gains appeared to invite fresh selling.

Volume increased to an estimated 17,300 lots from 13,410 lots the previous session when spreads totaled 2,662 lots or 20%, EFP 285 lots and EFS 70 lots. Options exceeded the futures turnover on a volume of 18,355 lots — 3,771 calls and 14,584 puts.

A slowdown generally is expected to be reported by USDA in U.S. export sales for the week ended July 24 from the strong business registered during the previous two weeks. The report is scheduled for release at 7:30 a.m. CDT on Thursday.

Mills have continued to buy but also have seemed in no hurry to extend their coverage amid weakening prices and prospects for larger supplies of new-crop cotton, industry sources said.

Bookings for 2014-15 already have reached 34% of the USDA forecast, not counting unshipped sales from 2013-14 to be rolled forward with the beginning of the new marketing year on Friday.

On the international scene, reports out of China said a special auction of government-owned stocks in Xinjiang, the main cotton producing province, will begin on Tuesday.

Sketchy details indicated 2013-14 upland cotton of more than 50,000 metric tons (229,600 bales) could be available.

In other international news, planting in India has expanded rapidly to reach 8.146 million hectares (20.13 million acres) by July 25, according to a progress report by the Directorate of Cotton Development.

This was roughly 2.35 million hectares (5.81 million acres) less than a year ago but up more than 2.5 million (6.18 million acres) from just a week earlier. Rapid progress was reported in the major producing states of Gujarat and Maharashtra following beneficial monsoon rains.

Meanwhile, the Federal Reserve said it would scale back its purchases of mortgage and Treasury bonds to $25 billion monthly and responded hours after a stronger-than-expected U.S. economic growth report with a modestly more upbeat assessment of inflation, jobs and the economy, Dow Jones Newswires reported.

“Economic activity rebounded in the second quarter,” the Fed said in its July policy statement, noting the labor market is improving, the jobless rate declining and inflation moving closer to its 2% objective. It included a qualifier noting that a range of indicators suggest there still is “significant” slack in the job market.

The move kept the central bank on course to end the bond program by October. But officials offered no clearer hint on the timing and mechanics of interest rate increases.

Futures open interest gained 487 lots Tuesday to 161,212, with DecemberΆs up 13 lots to 123,803 and MarchΆs up 149 lots to 28,616. Certificated stocks declined 10,945 bales to 146,136.

World prices as measured by the Cotlook A Index fell 60 points Wednesday morning to 80.40 cents. The premium to TuesdayΆs October futures settlement widened 32 points to 15.96 cents.

Forward A Index values for 2014-15 fell 50 points to 73.75 cents, narrowing the discount to the 2013-14 index by 10 points to 6.65 cents and widening the premium to TuesdayΆs December futures close by 37 points to 8.74 cents.