Oct 13 (Reuters) - ICE cotton futures gained more than 1 percent on Friday on short-covering after a bearish monthly crop supply-demand report from the U.S. government on Thursday pushed prices to over one-week lows.
The December cotton contact on ICE Futures settled up 0.78 cent, or 1.2 percent, at 68.62 cents per lb, marking its largest percentage gain in over a week. Prices were down about 0.3 percent for the week.
"Yesterday we had a very disappointing and bearish crop report and the market closed lower. Today we could not take out yesterday's low and therefore we lost that downside momentum so the shorts came in and covered their positions," said Keith Brown, principal at cotton brokers Keith Brown and Co in Moultrie, Georgia.
Earlier in the session prices fell to 67.67 cents per lb, near Thursday's low of 67.66. The contract on Thursday fell over 1 percent to post its biggest percentage fall in three weeks after the release of U.S. Department of Agriculture's (USDA) World Agricultural Supply and Demand Estimates (WASDE) report. The agency lowered U.S. production estimates for the 2017-18 crop year by 643,000 bales to 21.12 million bales.
Earlier in the day, USDA reported net upland sales of 154,400 running bales (RB) for the 2017-18 marketing year for the week ended Oct. 5, down 4 percent from the previous week. Exports of 118,000 RB were up 3 percent from the previous week, but down 11 percent from the prior four-week average, as per the report.
Meanwhile, speculators raised their net long position in cotton futures and options by 950 contracts to 51,886 contracts in the week to Oct. 10, the Commodity Futures Trading Commission data showed. Total futures market volume fell by 11,455 to 15,976 lots. Data showed total open interest fell 516 to 229,543 contracts in the previous session. Certificated cotton stocks deliverable as of Oct. 12 totaled 6,674 480-lb bales, unchanged from 6,674 in the previous session. The Thomson Reuters CoreCommodity CRB Index , which tracks 19 commodities, was up 0.85 percent.
(Reporting by Eileen Soreng in Bengaluru; Editing by Marguerita Choy)