April 22 (Reuters) - Cotton futures settled lower on Friday
for the second straight session, as the dollar strengthened and
investors took profits, but cotton still registered the highest
weekly gain in about eight months.
"The price action is impressive considering the dollar is
still strong and China is preparing for this (cotton reserve)
auction on May 2 unless they change it," said Keith Brown,
proprietor and cotton trader at Keith Brown and Co in Moultrie,
Georgia.
China will start annual cotton sales, set to occur from May
to August, in order to reduce its massive state reserves down to
a "reasonable level," the country's state planner said last
week.
China's Zhengzhou Commodity Exchange will raise the trading
limit and margin on some futures contracts, including cotton,
effective on April 26, the bourse said on Friday.

* The July cotton contract on ICE Futures U.S.
settled down 0.32 cent, or 0.50 percent, at 63.69 cents per lb.
The contract traded within a range of 62.88 and 64.02 cents a
lb. The contract ended the week up 6.1 pct, the biggest weekly
gain since the week of Aug. 14.
* Total futures market volume fell by 13,847 to 30,209 lots.
Data showed total open interest fell 295 to 189,644 contracts in
the previous session.
* The dollar index was up 0.55 percent. The Thomson
Reuters CoreCommodity CRB Index, which tracks 19
commodities, was down 0.12 percent.
* Speculators switched to their first net long position in
cotton contracts on ICE Futures U.S. since early February, U.S.
government data showed on Friday.
* China cotton futures on the Zhengzhou Commodity
Exchange were down 2.49 percent to 12,360 yuan per tonne.

(Reporting by Vijaykumar Vedala in Bengaluru; Editing by David
Gregorio)