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Cotton futures slip two per cent

Cotton futures slipped over two per cent on rumors that the world’s top consumer China is preparing to auction off some of its vast stockpile of the natural fiber next month, potentially unleashing fresh supply on a saturated global market. China may release about eight 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 curb China’s appetite for the fiber.

Speculators upped a bearish bet in cotton to the biggest on record in the week ended March 15. The front-month May contract on ICE Futures US settled down 1.2 cents, or 2.06 per cent - the biggest percentage loss in more than a week - at 57.16 cents per lb, after touching a low of 56.82 cents. The contract ended the week down about three per cent.

The dollar index was up 0.29 per cent. The Thomson Reuters CoreCommodity CRB Index, which tracks 19 commodities, was down 0.74 per cent. Speculators boosted their net short position in cotton by 3,952 lots to 40,488 lots, as prices touched fresh 2009 lows. That was the largest net short position in fiber since records dating back to 2006.