* First notice day sees July deliveries of 12,000 bales -ICE
* Fiber pressured by China ‘credit crunch’ worry -broker
* Close below key technical levels seen weighing on prices
NEW YORK, June 24 (Reuters) - ICE cotton fell for a sixth straight session on Monday, extending its slide after posting the biggest weekly loss in a year, undermined by concerns about the possibility of a credit squeeze in China, the world’s top textile market, which would slow fiber demand.
The benchmark December cotton contract on ICE Futures U.S. fell 1.46 cents, or 1.7 percent, to settle at 83.18 cents per lb.
Last week, the third-month contract registered its steepest down week in a year.
Global equities and commodities markets posted losses on concern that the U.S. Federal Reserve would scale down its monetary stimulus and that a potential slowdown in central bank lending in China would hurt economic growth in the world’s leading consumer of many raw materials.
“The market is looking down the road. It sees China getting into trouble and a credit crunch,” said Keith Brown, president of commodity firm Keith Brown and Co in Moultrie, Georgia.
Dealers said mill buying has been quiet during the recent slide.
U.S. weekly export sales and global cotton prices have been supported throughout the current crop year by solid demand from China.
Beijing began a stockpiling program in 2011, and China is now forecast to hold more than 60 percent of projected global inventories by the end of the 2013/14 crop year through July 2014.
Prices felt technical pressure after the December contract closed below its 50- and 100-day moving averages on Friday.
The front-month July contract settled down 2.17 cents, or 2.5 percent, at 82.98 cents a lb, as it headed toward expiration on July 9.
The July contract climbed above 90 cents earlier this month as investors boosted their bullish bets in cotton futures and options.
Since then, open interest has dropped as prices have fallen, interpreted as evidence of long liquidation.
Total open interest reached 162,076 contracts on Friday, down 6,951 lots from the previous session, the most recent ICE data showed.
The first notice day for July deliveries showed one brokerage expected to take delivery of 116 contracts worth of cotton, or about 12,000 bales, according to an ICE notice.
That was a small portion of total exchange stocks that reached more than 574,000 bales on Friday, with another 53,000 bales awaiting review by the U.S. Department of Agriculture (USDA), according to the most recent ICE data.
Concerns over short supplies helped drive the surge in July prices this month, but rising exchange stocks have eased some of those concerns.
Dealers eyed a USDA report due on Friday for an updated acreage outlook for the United States, the world’s top exporter.
Recent rains in drought-plagued Texas, the top producing state, have improved the 2013/14 crop outlook, dealers said. (Reporting by Chris Prentice; Editing by Peter Galloway)