May 23 (Reuters) - Cotton prices inched higher on Thursday as upbeat export sales data reassured traders of robust demand for U.S. cotton in the midst of a bitter U.S.-China trade spat, while the dollar weakened slightly.
* Cotton contracts for July rose 0.73 cent, or 1.1%, to 67.48 cents per lb, as of 2:18 a.m. EDT (0618 GMT).
* It traded within a range of 66.51 and 68.22 cents a lb.
* Earlier in the session, the U.S. Department of Agriculture (USDA) reported net sales of 381,400 running bales (RB) for marketing year 2018/19 were up 68% from the previous week.
* “The export data and inferences regarding export competitiveness of U.S. cotton are the primary price drivers today,” said Louis Rose, director of research and analytics at Tennessee-based Rose Commodity Group.
* Increase in export sales largely came for India (98,500 RB) as the world’s biggest cotton producer saw a drop in production to the lowest level in nine years.
* Also supporting cotton prices was a weaker dollar, Rogers Varner, president of Varner Brokerage in Cleveland, Mississippi, said. The U.S. currency, in which cotton is priced, hit a two-year high earlier in the session but reversed course.
* Cotton prices could rise to 68-70 cents for the July contract, with the weather being the most crucial factor in determining the direction of prices, Varner added.
* Meanwhile, concerns grew that the China-U.S. trade conflict was fast turning into a technology cold war between the world’s two largest economies.
* China fired a fresh salvo on Thursday, saying Washington needed to “correct” its “wrong actions,” while Reuters reported on Wednesday that Washington was considering Huawei-like sanctions on Chinese video surveillance firm Hikvision.
* Total futures market volume rose by 6,435 to 27,529 lots. Data showed total open interest gained 315 to 215,842 contracts in the previous session.
* Certificated cotton stocks <CERT-COT-STX> deliverable as of May 22 totaled 80,317 480-lb bales, up from 77,278 in the previous session.
(Reporting by Karthika Suresh Namboothiri in Bengaluru; Editing by Richard Chang)
