* Front month prices surge 7.6 pct during week
* Options expiration drives Friday's mixed trading -broker
* July cotton falls back from highest level since mid-March
NEW YORK, June 14 (Reuters) - Cotton futures were little changed during choppy, options-related dealings on Friday, though they posted steep weekly gains on short covering ahead of the July contract's expiration and a bullish U.S. Department of Agriculture report.
The most-active December cotton contract on ICE Futures U.S. inched up 0.29 cent, or 0.3 percent, to 89.44 cents per lb, rallying to a 5 percent weekly gain.
Trading was mixed throughout the day amid heavy volumes.
"There's some squaring up and positioning, mitigating risk here at expiration," said a U.S. broker, referring to options expiration on Friday.
"The entire day was a seesaw in both July and December contracts."
The ICE front-month July contract edged down 0.42 cent, or 0.5 percent, at 91.29 cents a lb after climbing to 92.58 cents, the highest since mid-March when prices reached a one-year high of almost 94 cents.
Despite closing down on the day, the front month surged 7.6 percent this week, the biggest weekly gain since October and was poised for the steepest monthly rally since February 2011.
Short covering supported both contracts throughout the week, as traders sought to exit contracts ahead of the July contract's expiration on July 9.
New investor buying also drove recent gains, dealers said.
Speculators added to their bullish bets in cotton futures and options in the week to June 11, weekly U.S. government data showed.
A USDA forecast on Wednesday was seen as bullish, as the monthly report projected lower-than-expected U.S. stocks and production in the 2013/14 crop year that starts Aug. 1.
The report maintained its outlook for record global stocks, as China adds to its stockpiles.
ICE certified stocks climbed to nearly 540,000 bales on Thursday, the most recent exchange data showed, the highest level since June 2010. (Reporting by Chris Prentice; Editing by Kenneth Barry)
