* Prices settle between 10- and 50-day MA
* Weekly export sales show continued interest from China
* Status of China's import licenses in focus

NEW YORK, Aug 16 (Reuters) - Cotton prices drifted lower on
Thursday as a spate of profit-taking brought an end to two days
of gains, with the market stuck in a 7-cent range.
The benchmark December cotton contract on ICE Futures
U.S. fell 0.71 percent to settle at 72.59 cents per lb as the
market settled between its 10-day and 50-day moving averages.
August is shaping up to be another range-bound month, with
prices stuck in a 7-cent band amid extremely low volumes. That
is wider than July's 4-cent range, but is in stark contrast to
the wild fluctuations that roiled the market earlier this year.
Just under 7,000 lots changed hands on Thursday, a third of
the 30-day and 250-day moving averages.
The subdued conditions reflect investor caution amid falling
demand, growing supplies and a withdrawal of speculative money.
Trading has also been light due to the Northern Hemisphere
holiday season.
Even so, traders reported some interest in call options as
high as 80 cents, pointing to some latent optimism later in the
year.
Traders were hoping for news that could wake the market from
its slumber, with eyes on India, the world's second-largest
producer, where crops have been hampered by weak monsoon rains.
Weekly U.S. sales data from the U.S. Department of
Agriculture showed continued interest from China, which
accounted for just over a third of upland exports for the week
to Aug. 9, but the report contained few surprises.
Market participants have speculated that buying may increase
further as textile mills replenish their inventory if Beijing
issues fresh import licenses.
Many mills have exhausted their quotas, and suppliers hope
they will need to import more material before the year-end. That
could help to eat into record global stocks.
But with an estimated 800,000 to 1 million tonnes of cotton
sitting in bonded warehouses in the country, supplies on the
ground may be ample for mills' immediate needs. After all,
demand has been lackluster, in line with the global economy.
"It may create a buying opportunity, but the material on
consignment is already high," said Sharon Johnson, senior cotton
expert at Knight Futures in Atlanta.