NEW YORK (Dow Jones)--Cotton prices gained modestly Thursday as tight
supplies supported the market.

Nearby cotton for July delivery ended 0.03 cent, or 0.04%, higher at 84.48
cents a pound on ICE Futures U.S. The most actively traded December contract
settled 0.56 cent, or 0.7%, higher at 78.72 cents a pound.

Cotton prices are treading water in a bullish atmosphere as the world
economic recovery sparks a rebound in textile demand. Prices are up 62% from
the same time last year, as traders await the Northern Hemisphere harvest in
the U.S. Traders are selling the remnants of available supplies to textile
mills who are trying to meet demand from retailers.

Demand is the key to the market and projections are bullish, said Sid Love,
analyst at Kropf & Love Consulting in Overland Park, Kan.

The U.S. Department of Agriculture projects world cotton production will
fall short of demand by 13.5% in the current season, and still 5% short in the
next crop year beginning Aug. 1.

December futures are forming a tight range from 78 to 80 cents, said Sterling
Smith, market analyst at Country Hedging in St. Paul, Minn.

Traders likely bought back short positions Thursday to exit bearish bets as
the market moved above 78 cents, Smith said. Some fresh bullish longs may have
also entered the market at that point, he said.

The market is capped at 80 cents as selling related to producers hedging next
season's crop comes in at that level.

Traders are looking ahead to the June 30 planted cotton acreage estimate
from the USDA. Planted acreage was estimated at 10.51 million acres March 31.
Those acres are the foundation of possible production this season.

The U.S. cotton crop was rated 62% in good-to-excellent condition in the week
ended June 20. Traders are keeping an eye on weather conditions, which are
mostly favorable in the Southeast U.S. and Mississippi River Delta regions,
forecaster Meteorlogix said.

In the southwest, conditions are favorable for the developing crop through
West Texas, the top U.S. production region, Meteorlogix said. Southwest cotton
development continues, but at a slower pace than in recent years, according to
the forecaster. ICE daily cotton stocks decreased by 33,836 500-pound bales
Wednesday to total 490,639, with 33,091 decertification orders, according to
exchange data.

ICE cotton open interest--the number of active positions left at the end of
the session--decreased by 1,799 positions Wednesday to total 163,349, according
to the exchange.

Volume was an estimated 10,998 lots. In options, approximately 925 calls and
726 puts traded on the floor, according to exchange data.

Close Change Range
Jly 84.48 +0.03 83.55-84.80
Oct 80.01 +0.45 79.30-80.45
Dec 78.72 +0.56 77.89-78.99