ICE cotton futures rose to a near two-week high on Monday as investors covered and squared short positions ahead of a federal monthly demand and supply report.

Cotton contracts for July rose 0.42 cent, or 0.75%, to 56.69 cents per lb as of 1:00 p.m. EDT (1700 GMT). It traded within a range of 55.75 and 57.15 cents a lb, its highest since April 29.

“Prices are being boosted somewhat by pre-report positioning, looking for a greater need for squaring up position sizes rather than going through with a big bet," said Jon Marcus, president of Lakefront Futures and Options brokerage in Chicago.

The US Department of Agriculture's (USDA) monthly World Agriculture Supply and Demand Estimates (WASDE) report is due at 12:00 p.m. EDT (1600 GMT) on Tuesday.

Speculators increased their net short position in cotton futures by 1,538 contracts to 13,023 contracts in the week to May 5, US Commodity Futures Trading Commission (CFTC) said on Friday.

Total futures market volume fell by 12,749 to 12,611 lots. Data showed total open interest fell 1,244 to 174,331 contracts in the previous session.