The progress in cotton markets stalled after experts in the commodity lowered price expectations, noting better hopes for production than they had previously pencilled in.

The International Cotton Advisory Committee trimmed by 2 cents to 85 cents a pound its forecast for cotton prices in 2010-11.

The revision by the intergovernmental body, which represents both farmers and consumers, reflected 200,000-tonne increase to 25.2m tonnes in its estimate for production, which is set to jump by more than 50% in the US, the world's top cotton exporter.

Major producers including top-ranked China and second-placed India are also set to increase output.

World inventories now looked on course to hit 9.6m tonnes at the close of 2010-11, also 200,000 tonnes more than forecast, weakening marginally cotton's stocks-to-use ratio, a key metric in determining commodity prices.

'The great question'

Cotton for October delivery eased 0.7% to 83.30 cents a pound in New York, as of 10:00 GMT, interrupting a steady rise which has gained the contract nearly 8% over the last two weeks.

Nonetheless, cotton prices have remained relatively rangebound, hemmed in by more uncertain economic conditions, after doubling in the year to the end of February as hope for recovery took hold.

Cotton, being an industrial material, is more responsive to economic conditions than its edible food commodity peers.

It also faces a jump in US sowings. "The great question in the cotton market is whether the growing US new crop supply can be counterbalanced by continued growth in demand from Asia," Terry Roggensack at Hightower Report said.

He added that cotton was unlikely to enjoy the "sharp uncorrected rally" that wheat has enjoyed.

"That is because cotton is still relatively close to its recent highs, and trend-following funds have been long in cotton this year, instead of short as has been the case in wheat," he said.