Cotton futures prices fell sharply Wednesday on the Cotton Exchange in New York as concern about a shortage of cotton available for delivery next month was relieved.
Ernest Simon, a cotton analyst in New York with Prudential-Bache Securities, said prices had been supported in past weeks by concern that a shortage of deliverable cotton was developing.
However, he said, such concerns proved unwarranted Wednesday, when traders posted notices that they would deliver cotton against 53 futures contracts, each calling for delivery of 50,000 pounds.
Further, Simon said, the number of open contracts, about 13,900 is relatively low.
He said the price decline was aggravated by technical factors such as trends on price charts.
Cotton settled 0.27 cent to 3.02 cents lower with the contract for delivery in May at 65.25 cents a pound.