NEW YORK, Oct 25 (Reuters) - Cotton futures eased on Friday and slid to their biggest weekly loss in two months as Northern Hemisphere harvests gathered pace and the return of key U.S. government data reinforced concerns over slowing demand and excess supplies.
The most-active December cotton contract on ICE Futures U.S. closed down 0.13 cent, or 0.2 percent, at 79.08 cents a lb, reversing the day's earlier gains.
The contract touched a nine-month low on Thursday and posted its biggest down week since late August, as the return of U.S. government data reinforced worries over excess supplies.
Technical pressure added to the losses. A fall past a key trend line near 81.70 cents a lb drove waves of selling earlier in the week.
Favorable weather has improved the outlook for supplies in the United States, the world's top exporter, and a bumper crop in No. 2 producer India.
'The harvest pressure is coming on, the crops are looking OK, and China may be slowing on the import front,' said Peter Egli, director of risk management for Plexus Cotton Ltd, a British-based medium-sized merchant.
The U.S. Department of Agriculture (USDA) on Thursday released its first weekly export sales data since the end of a partial government shutdown earlier this month when the agency went dark.
Though the data was weeks old, it showed total sales had fallen during the week ending Oct. 3 and reinforced worry over waning demand in the face of high prices, particularly in the world's top consumer China.
A U.S. government crop progress report released at the start of the week showed that the crop was in better shape than at the same time last year, easing worries of tight U.S. supplies.
Exchange stocks rose to over 110,000 bales on Thursday, with another nearly 48,000 awaiting review by the USDA, the most recent ICE data showed.
The first release of the weekly Commitment of Traders (COT) report showed that speculators boosted their long position in cotton futures and options in same week that cotton prices touched six-week highs as a weather-risk premium build ahead of Tropical Storm Karen.
Since then, prices have tumbled 9 percent, and traders said they expect investors have steeply dialed back their bullish stance.
Two more delayed COT reports are due to be released during the week of Oct. 28, followed by another two in the week of Nov. 4, before reverting to the normal schedule from Nov. 8.
(Reporting by Chris Prentice; Editing by Marguerita Choy) Keywords: MARKETS COTTON/
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