* Rekindled euro zone crisis weighs on cotton futures
May 23 (Reuters) – Cotton futures settled Wednesday at a fresh 2-1/4-year low on speculative sales touched off by renewed worries over euro zone debt, analysts said.
Key July cotton on the ICE Futures U.S. exchange dropped 3.01 cents to end at 71.51 cents per lb, ranging from 70.53 to 74.26 cents.
It was the lowest settlement close for the spot cotton contract since early February 2010, according to Thomson Reuters data.
New-crop December fell 2.82 cents to close at 68.75 cents, dealing between 67.73 and 71.40 cents.
World stocks skidded and the euro fell to a 21-month low as worries over Greece’s possible exit from the euro zone and how it would adversely impact global economies hit cotton futures as well.
Traders said that aside from fears over the euro zone, cotton was also pressured by talk that China may be selling some of its state reserves and that some cancellations of U.S. cotton exports may have taken place as the price tumbled.
“Everything seems to be interconnected today,” said independent cotton analyst Mike Stevens of Mandeville, Louisiana.
Traders said any cancellations by China will only show up in the U.S. Agriculture Department’s weekly export sales report next week when the activity for this week is tallied.
The 14-day relative strength index reading stood near 21, from a previous reading of 24. A reading of 30 or below normally means a market is oversold and one of 70 or higher means it is overbought.
Volume on Wednesday reached slightly over 33,000 lots, about a third above the 30-day norm and on track for a fourth day of rising volume traded, Thomson Reuters data showed.
The amount traded on Tuesday stood at 23,879 lots, having risen for the third consecutive session, according to exchange data.
Open interest in the cotton market, an indicator of investor interest, amounted to 190,015 lots as of May 22, the highest level since April 5, ICE Futures U.S. exchange data showed.
(Reporting by Rene Pastor)