Cotton futures flat, trade volume thin ahead of weekly sales data

ICE cotton futures held firm in a low volume trade on Thursday, helped by optimism surrounding the US-China trade deal, while investor waited for federal export sales data from the US Department of Agriculture (USDA).

Cotton contracts for March was flat at 68.70 cents per lb by 12:50 p.m. EST (1750 GMT).

It rose to 69.34 cents earlier the session - a fresh more than six-month high.

"Well its been another low volume trade," said Jack Scoville, vice president at Chicago-based Price Futures Group.

"There was some initial buying... I think some follow through from news about China and the US getting together."

Chinese commerce ministry spokesman Gao Feng said that both sides were in close touch with regards to signing a phase one deal.

The United States is one of the world's biggest producers of the natural fiber, while China is the largest consumer.

The USDA will release the weekly export sales report on Friday, delayed due to Christmas Holiday.

Last week, the USDA in its weekly export-sales report showed net sales of 249,400 running bales (RB) for the 2019/20 marketing year for the period ended Dec. 12.

"The overall standard daily technical analysis for the March contract remains bullish, with the market now in an overbought condition," said Louis Rose, director of research and analytics at Tennessee-based Rose Commodity Group in a note.

Total futures market volume fell by 1,122 to 15,240 lots. Data showed total open interest gained 1,422 to 214,041 contracts in the previous session.