* Market consolidates after Friday’s relief advance
May 21 (Reuters) – Cotton futures settled firmer Monday on modest speculative sales to scupper a short-lived rebound which lifted fiber contracts from the 2-1/4 year low it hit last week, analysts said.
Cotton paid little attention to firm outside markets, with global stocks rebounding as world leaders emphasized their support for economic growth and China said it is open to embark on more steps to stimulate business.
Key July cotton on the ICE Futures U.S. exchange slipped 0.47 cent to end at 77.52 cents per lb, moving from 76.49 to 79.05 cents.
New-crop December fell 0.64 cent to finish at 74.57 cents, trading from 73.75 to 76.30 cents.
Sharon Johnson, senior cotton analyst for commodity brokerage Penson Futures in Atlanta, Georgia, said speculative accounts likely pressured cotton, but there was “no news of consequence” on the fundamental front.
July held above the Thursday low of 76.26 cents, but December slipped under the Thursday low of 73.78 cents by trading at 73.75, with the contract low of 73 cents beckoning further afield.
Independent analyst Mike Stevens said market orders right at the close of trade pared cotton’s losses.
Traders said the market’s next move will still depend to a great degree on the euro zone debt crisis and how it is feeding into a strong U.S. dollar. There is also the presence of a large U.S. cotton crop affecting the market.
Analysts said activity may thin out slightly as several merchants attend an industry meeting of the American Cotton Shippers Association later in the week in Denver.
The 14-day relative strength index reading stood near 29. A reading of 30 or below normally means a market is oversold and one of 70 or higher meant it is overbought.
Volume on Monday reached almost 16,500 lots, about a third under the 30-day norm, Thomson Reuters data showed.
Open interest amounted to 188,931 lots as of May 18, ICE Futures U.S. exchange data showed.
(Reporting by Rene Pastor; Editing by John Picinich)