NEW YORK, Jan 25 (Reuters) - Cotton futures closed
easier Wednesday on technical selling by investor sales for the
second straight session, and analysts said momentum pointed to
more losses over the next few days.

Benchmark March cotton on ICE Futures U.S. fell 1.26
cents, or 1.2 percent, to settle at 96.92 cents per lb after
trading from 98.05 to 94.59 cents which marked the lowest since
Jan. 13.

The contract had been on a steady uptrend that began after
it hit a 17-month low on Dec. 14.

Volume traded on Wednesday amounted to about 23,600 lots,
more than 50 percent over the 30-day norm, according to
preliminary Thomson Reuters data.

'The market was overdone. It's overbought,' said Jobe Moss,
an analyst for brokers and merchants MCM Inc. in Lubbock, Texas.

Traders said March could eventually test downside targets at
94.52 cents which was the Jan. 13 low, the Jan. 12 low of 94.13
and then the Jan. 9 low of 93.22 cents.

But the dealers said that every time cotton drops sharply,
support emerges in the form of trade buying that prunes losses.

'That's what we got again today,' one said.

Fundamentally, the market has derived strength from buying
by China, the world's leading consumer of cotton, for its
textile and apparel industry.

As a result, the trade awaited the weekly export sales
report of the U.S. Agriculture Department, due Thursday at 8:30
a.m. EST (1330 GMT).

Open interest, an indicator of investor exposure, stood at
165,008 lots as of Jan. 24, up for the 10th session and posting
a rise of almost 8.5 percent this year.

Tuesday's volume stood at 23,626 lots, ICE Futures U.S. data
showed.