By Julie Wernau

Cotton prices erased their gains Friday to close lower after concerns about weakening demand for cotton outweighed weather woes in U.S. growing regions.

Recent rains have threatened emerging cotton in the Carolinas and Virginia and various forecasts for the weekend have predicted that coastal and inland flooding from a hurricane--currently over the Bahamas--could hit those cotton-growing regions, where the emerging crops are in need of dry weather. Cotton prices rose as high as 61.20 cents a pound for December delivery in early trading before ending down 0.8%, at 60.14 cents a pound, on the ICE Futures U.S. exchange.

"I think the market is very focused on the demand side," said Louis Rose, founder of commodities-consulting firm Risk Analytics.

Mr. Rose said sales of U.S. cotton are running slower so far this year than USDA projections of 10.2 million bales. He said many mills already picked up cotton at low prices and aren't looking for more.

The International Cotton Advisory Committee said late Thursday, after the cotton market closed, that lower cotton prices in the year ended July 31 are likely to result in fewer planted acres this year. It projected that world cotton area will drop 7%, to 31.1 million hectares (77 million acres), this year, resulting in a reduction in world cotton production of 9%, or 23.8 million tons.

In other markets, arabica coffee for December rose 3%, to end at $1.243 a pound; cocoa for December dropped 0.3%, to close at $3,095 a ton; raw sugar for March delivery ended higher, up 2%, to 13.53 cents a pound; and frozen concentrated orange juice futures for November ended flat, at $1.0535 a pound.