NEW YORK: Cotton futures edged up on Thursday, consolidating after recent losses and underpinned by expectations an upcoming heat wave across the western United States could reduce output in the world's top exporter.
The most-active December cotton contract on ICE Futures US closed up 0.18 cent, or 0.2 percent, at 83.88 cents a lb, its second gain in the past nine sessions.
Expectations of hot weather across the western United States prompted worry over cotton-growing conditions and pushed prices to limited gains, though concerns lingered over demand, especially in China following talk of a potential credit squeeze and weaker-than-expected economic data in the world's top textile market.
"There's not a lot of direction here, and there's some anxiety over consumption or business," said a US trader.
"We're a weather market right now. The weather is not good for cotton."
US weekly export data showed that mill business in the week ending June 20 had slowed, as an over 4-percent drop in futures prices failed to stir overall demand.
Sales were down 18 percent and exports down 31 percent from the previous week, US Department of Agriculture data showed.
Dealers eyed a USDA report due on Friday for an updated acreage outlook, an early indication of the 2013/14 crop size.
Merchants remained concerned over short supplies heading into the new crop year that begins Aug. 1.
A large July delivery may slash exchange stocks, the new crop is expected to be delayed after unfavorable planting weather, and the US carryover is forecast to be the lowest in three years.
As a result, the December/March spread widened for a third straight session, putting the December contract at a premium of 1.74 cents a lb, up from 1.60 cents previously and 0.68 cent at the start of the week.
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