Cotton falls for second day, nears fresh one-month low
March 20 (Reuters) -U.S. cotton futures fell for a second straight session on Wednesday to hit its lowest in almost a month brought down by a rally in the dollar and downbeat sentiment across oil and equity markets.
* Cotton contract for May CTc1 fell 1.25 cents, or about 1.3%, to 92.09 cents per lb by 12:08 p.m. ET (1608 GMT).
* The contract hit its lowest since Feb. 21.
* The dollar index hit its highest in over two weeks, up about 0.4%, making the natural fibre more expensive for buyers overseas. USD/
* Pressuring the natural fibre "we see a very firm U.S. dollar... and we also see pressure across other soft such as sugar, coffee and even cocoa today," said Valentin Olah, risk management consultant at StoneX Group.
* "On the fundamental side U.S. cotton remains uncompetitive against Brazil and Australia, whose basis levels have been slashed with weak demand for raw cotton and soft yarn prices, not to mention possible bumper crops."
* Adding to the downbeat sentiment, Wall Street's main stock indexes and oil prices fell, as investors braced for the U.S. Federal Reserve's interest rate policy announcement later in the day. .N O/R
* Lower oil prices make polyester, a cotton substitute, less expensive.
* "On the technical side, last week we detected a bearish head and shoulders pattern in spot May 24 contract which has been defying the trend," Olah added.
* The market now awaits U.S. Department of Agriculture's (USDA) weekly export sales report due on Thursday.
* Last week, the USDA's report showed net sales of 85,800 running bales. EXP/COT
Reporting by Rahul Paswan in Bengaluru; Editing by Shailesh Kuber
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