Cotton for December dropped 3.4% to 96.09 cent a pound in New York on Friday, adding to 4% losses in the last session, when the contract fell the maximum daily level allowed by the exchange.
"We will probe the downside until we find support," Mike Stevens, the veteran Louisiana trader, said.
"That support has appeared in the past around the 95-98 cents level. But it remains to be seen whether it is still there."
The dip was attributed in part to fears for the world economy, whose prospects have been dimmed by the sustained eurozone debt crisis.
But it also comes amid growing uncertainty over whether China is to make further purchases of US cotton, after the country made confirmed orders of 1.6m running bales over two weeks, with a further 528,000 running bales down for import from markets unspecified as yet.
At more than 1bn pounds, these orders equate to well over 450,000 tonnes – about one-quarter of the sum that China was expected to purchase over the whole of 2011-12 to rebuild state supplies.
And the country on Friday said it had bought 1m tonnes of cotton altogether from exporters.
In addition, China has bought some 585,000 tonnes of cotton from domestic farmers, it first purchase of domestic crop in three seasons, to prop up the domestic market, after prices fell below the support level of 19, 800 yuan a tonne.
Whether China will import more of the fibre now, at what price and from whom, "is the $64m question", Mr Stevens said.
"If you can work out what the Chinese are up to, bottle it and sell it, you would be able to retire."
But if China doesn’t return for now, the dearth of cotton buying from elsewhere revealed in weekly US Department of Agriculture export sales reports will add cotton to soybeans and corn as crops over which investors have doubts about exports hitting targets.
"With China, export numbers have been negative or thereabouts," he said.
Indeed, the world, having relied heavily on US exports last season, is now "in equilibrium".
"The gap between production and consumption in the rest of the world has narrowed tremendously. Two years ago it would about 20m bales. Now it is 3m bales."
And even the orders that China has put in place are not as bullish as they might appear, in being made for storage rather than consumption, Keith Brown, at Georgia-based brokerage Keith Brown & Co, said.
"That cotton is not being consumers. It is not being spun into yarn and turned into clothing," Mr Brown said.
"It is still out there," ready to be returned to the market at a future date.
The one consolation for US cotton growers is the firm market for so-called "long staple" cotton, whose longer fibres make for higher quality cloth, and for which there is "good demand", Mr Stevens said.
"The US crop is a little bit shy on staple length right now. It is the shorter staple length which is looking for a home."