* Prices edge down after August losses
* December cotton closes below the 200-day moving average
* Speculator selling seen continuing after big drop in net long position
NEW YORK, Sept 3 (Reuters) – Cotton futures eased on Tuesday, pressured by long liquidation and technical weakness after falling 2 percent last month.
The most-active December cotton contract on ICE Futures U.S. slipped 0.78 cent, or 0.9 percent, to settle at 82.71 cents per lb.
The December contract remained under technical pressure and closed below the 200-day moving average of 83.60 cents a lb.
Trading volume was below average following the long weekend. ICE Futures U.S. agricultural markets were closed on Monday for the U.S. Labor Day holiday.
Noncommercial dealers dropped their bullish bet in cotton the most in at least a year in the most recent reporting week, weekly U.S. government data showed on Friday.
Prices rallied to a five-month high in mid-August, then succumbed to an even quicker descent as the speculators who piled into the market slashed their bullish investment.
“As the longs continue to get out of the market, we go a little bit lower,” a U.S. broker said. “There is some trade support, but they’re not chasing the market.”
The December contract has slumped nearly 12 percent from last month’s peak of 93.72 cents a lb.
The gyrations left fiber as the third worst performer last month among the 19 commodities in the Thomson Reuters-Jefferies CRB index, a benchmark for global commodities.
Concerns over changes to China’s stockpiling policy have eroded the bullish sentiment that helped drive last month’s rally. The government program has driven voracious demand for foreign cotton in the world’s top textile market.
Further, a U.S. Department of Agriculture weekly crop progress report due Tuesday afternoon was expected to show little change from the previous week following recent improvements in the U.S. cotton crop.
Dealers said that trade buying and expectations of a late crop in the United States, the world’s top exporter, underpinned the market.
Certified stocks continued to decline, ICE data showed, falling below 20,000 bales for the first time since November. (Reporting by Chris Prentice; editing by Jim Marshall)