Cotton futures slipped over 2 percent Friday on rumours that world's top consumer China is preparing to auction off some of its vast stockpile of the natural fibre next month, potentially unleashing fresh supply on a saturated global market. Traders said talk was circulating that Beijing had indicated plans to release about 8 million bales of cotton in late April.
While that is only a small portion of the state's reserve of about 60 million bales, it renewed concerns that the release would c
Cotton futures posted its biggest daily gain since early December on Monday, as technical strength triggered short-covering. Speculators had increased their net short position in cotton by 9,673 lots to 36,537 lots in the week ended March 8, as they lifted their bearish bet in cotton to the biggest in nearly a decade, government data after market close on Friday showed.
"It's a technical rally and you have an overwhelming (number of) shorts in the market," said Lou Barbera of ICAP Cotton.
