NEW YORK, May 9 (Reuters) - Cotton futures closed lower in
New York on Friday and touched a more than a week low after the
U.S. Department of Agriculture forecast higher production, lower
demand and rising inventories for the upcoming season.
The most-active July cotton contract on ICE Futures U.S.
settled down 0.69 cents, or 0.74 percent, at 92.36 cents
per lb. The session's low was 92 cents, the lowest since April
29.
For the week, the July contract, the market's second-month
position, was down 2 percent.
In its first estimate for the next marketing year, which
starts on Aug 1, the government warned that China, the world's
largest textile market, will slash imports by a third in 2014-15
as the Chinese government overhauls its stockpiling policy.

For the United States, the USDA said it expects ending
stocks to rise to 3.9 million 480-lb bales from 2.8 million in
the current crop year, in line with market expectations.
The global outlook was more bearish though, with ending
stocks seen rising to 101 million bales from 97.91 million in
2013-14, setting a record high for a fourth straight year.
Most traders and analysts scoffed at the estimate, which was
higher than the 99.9-million bales expected in a Reuters survey
ahead of the release.
Keith Brown, principal at cotton brokers Keith Brown and Co
in Moultrie, Georgia, said he expected the market to treat the
USDA report as "a bad dream, as the Texas weather looks hot and
dry again next week, and we will probably wake up to the reality
that the cotton crop will come in much less."
The forecast came after Thursday's bullish weekly exports
data for cotton, which showed net sales of U.S. all upland
cotton up 11 percent from the previous four-week average. The
report surprised some traders who had expected lower exports due
to competing sales of Chinese cotton.
"The USDA gave itself permission to be more aggressive in
cutting (Chinese) production than the market expected," said
Sharon Johnson, senior cotton analyst at KCG Futures, a division
of commodities broker Knight Capital, in Roswell, Georgia.
"It was a surprise, but it's not unusual in their case."
Total market open interest rose to 196,506 lots on Thursday,
up from Wednesday's 195,914, and the highest since Nov. 1, 2013,
ICE data showed.
Speculators have piled into the cotton market, raising their
bets in the most recent reporting week, as dry skies in Texas
stoked worries over tight supplies.
A weekly U.S. government report released on Monday after the
market closed showed U.S. farmers were planting less than in
previous years, with 16 percent of acres sown compared with the
five-year average of 25 percent.