NEW YORK: Cotton futures slumped more than 4 percent on Thursday to their lowest level in over four months as fears about the economic impact of the spreading coronavirus dented risk sentiment among investors.

Cotton contracts for May settled down 2.97 cent, or 4.5%, at 62.5 cents per lb. It traded within a range of 62.47 and 65.47 cents a lb.

It slipped to 62.47 cents per lb earlier in the session, the level last seen on Oct. 11.

Investors are ignoring the good fundamentals for cotton and are trading on the panic of the coronavirus, said Keith Brown, principal at cotton brokers Keith Brown and Co in Moultrie, Georgia.

The export sales were positive, especially with China being one of the major buyers this time, Brown said.

Global financial markets extended their sell off as new infections reported around the world surpassed those in mainland China.

“The spread of the Wuhan (COVID-19) virus continues to plague our (cotton) market, as well as most other,” said Louis Rose, director of research and analytics at Tennessee-based Rose Commodity Group in a note.

“We remain skeptical of the aggregate appetite of specs to sell this market outright.”

Meanwhile, the United States Department of Agriculture reported net sales of 214,600 running bales (RB) for 2019/2020, which included 39,600 RB sales to China.

Total futures market volume rose by 25,279 to 64,946 lots. Data showed total open interest gained 817 to 195,727 contracts in the previous session.—Reuters