Forex Pros — Cotton futures were down for a second day on Monday, pressured by a broadly stronger U.S. dollar and amid indications of a slowdown in global demand for the fiber.

On the ICE Futures U.S. Exchange, cotton futures for July delivery traded at USD1.5375 a pound during European morning trade, tumbling 1.6%.

It earlier fell by as much as 1.95% to a daily low of USD1.5326 a pound.

The Confederation of Indian Textile Industry said on Friday that it planned to cut production by a third because of a “huge decline” in demand.

Chairman of the South India Mills Association, J. Thulasidharan said that such drastic steps were needed to ensure a reasonable price and boost sagging demand for cotton yarn.

India is the world’s second largest cotton producer.

The U.S. Department of Agriculture said last Thursday that a net total of approximately 30,500 bales of cotton for delivery before July 31 were cancelled in the week ended May 12, the eighth straight week that deals were canceled on a net basis.

Elsewhere, preliminary data on Monday showed that the Markit/HSBC Chinese manufacturing purchasing managers index fell to a 10-month low of 51.1 in May, adding to concerns over a slowdown in the world’s largest cotton consumer.

Meanwhile, a broadly stronger U.S. dollar also weighed. The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, was up 0.87% to hit 76.44, after earlier rising to a seven-week high of 76.54.

A stronger dollar reduces the appeal of U.S. crops to overseas buyers and makes commodities less attractive as an alternative investment.

Elsewhere, wheat for July delivery slumped 0.7% to trade at USD8.0075 a bushel, corn for July delivery shed 0.15% to trade at USD7.5888 a bushel, while soybeans for July delivery dipped 0.35% to trade at USD 13.7462 a bushel during European morning trade.