Oct 6 (Reuters) - ICE cotton futures edged up on Friday, supported by worries about the potential impact of Tropical Storm Nate on the natural fiber crop but gains were limited as the system was not expected to cause damage in major producing regions Texas and Georgia.
Cotton contracts for December settled up 0.57 cent, or 0.83 percent, at 68.84 cents per lb. It traded within a range of 67.8 and 69.19 cents a lb. The contract was up about 0.6 percent for the week.
"Tropical Storm Nate is going to move towards New Orleans and Birmingham, Alabama, up to Nashville, Tennessee. There is cotton in that path, but not a massive amount of the crop," said Keith Brown, principal at cotton brokers Keith Brown and Co in Moultrie, Georgia. "If more crop was in danger the market would have gone back to 70 cents up today."
The U.S. National Hurricane Center said Tropical Storm Nate, located just north of Honduras, was projected to strengthen into a Category 1 hurricane over the next couple of days as it moves towards the Gulf of Mexico.
With landfall expected somewhere near New Orleans, Nate would move in between the major cotton areas of the Delta and the Southeast, Plexus Cotton said in a note. "While open fields might still see 2-4 inches of rain and strong winds, which could impact quality, it doesn't look like a major problem at this point." "Another weather concern is a cold front moving into West Texas around the middle of next week ... if this cooler than normal weather were to persist, it could affect yield as well as fiber quality."
Speculators reduced a net long position in cotton futures and options to a one-month low, the Commodity Futures Trading Commission data showed. The dealers cut a cotton net long position by 6,843 contracts to 50,935 contracts. Total futures market volume fell by 719 to 17,041 lots. Data showed total open interest fell 753 to 229,578 contracts in the previous session. The dollar index was down 0.17 percent. The Thomson Reuters CoreCommodity CRB Index , which tracks 19 commodities, was down 1.09 percent.
(Reporting by Swati Verma in Bengaluru; Editing by Sandra Maler)
