Cotton futures to lowest levels in five weeks in light trading

Cotton futures to lowest levels in five weeks in light trading

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* December prices ease to lowest level since Sept. 9

* Trade selling, building harvest pressure weighs on prices

* USDA considers cancelling October's monthly crop report

* China's September imports fall 23 pct from previous year

NEW YORK, Oct 16 (Reuters) - Cotton futures eased on Wednesday to their lowest point in more than five weeks, pressured by trade selling and favorable harvest weather in the United States, the world's top exporter.

The most-active December cotton contract on ICE Futures U.S. closed down 0.55 cent, or 0.7 percent, at 83.16 cents a lb, after touching 82.93 cents a lb, its weakest level since Sept. 9.

After the trading session closed, U.S. Senate leaders announced a deal to end a political crisis that partially shut down the federal government.

Volumes have been light as the partial U.S. government shutdown dragged on and the U.S. Agriculture Department (USDA) remained dark. The shutdown left traders without key weekly reports on export sales, crop progress, and commitments of traders.

A senior official said on Wednesday the USDA will decide by the end of this week whether to cancel its monthly U.S. crop production report and a companion report on output and usage which were delayed from their scheduled date of Oct. 11.

The U.S. cotton harvest, while late, has had favorable weather, and light pressure has started to build on the market as bales begin to get classed and traders start to unwind long positions in the nearby contract.

The harvest is now under way throughout the Northern Hemisphere, including in top producers China and India.

"There's been some producer selling, and the speculators continue to peel off in light numbers," said Sharon Johnson, a cotton specialist with KCG Futures in Atlanta, noting a slight decline in market open interest.

Mill fixations and new buying underpinned prices and shielded cotton from steeper losses, dealers said.

The December contract's discount to March prices widened to 1.12 cent a lb from 0.98 cent previously, as certified stocks continued their climb and eased worries over tight nearby U.S. supplies.

Exchange stocks rose to 38,477 bales on Tuesday, with another 41,529 bales awaiting review, the most recent ICE data showed.

China, the world's top consumer, imported 201,300 tonnes of fiber last month. That represented a year-over-year drop of 23 percent and was seen as largely in line with traders' expectations of China's reduced demand for foreign cotton in the 2013/14 crop year that ends July 30. (Reporting by Chris Prentice; editing by Jim Marshall)

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