* Small speculators nudge fiber contracts down
* Trade eyes USDA supply/demand report next week

NEW YORK, May 3 (Reuters) - Cotton futures closed lower
Thursday on thin sales by small speculators and analysts said
the market would drift ahead of next week's government crop
report.
July cotton on the ICE Futures U.S. exchange slipped
0.30 cent to settle at 89.21 cents per lb, trading from 89.05 to
89.74 cents. It was an inside day since the range was within
Wednesday's 88.85 to 89.94 cents band.
New-crop December shed 0.06 cent to end at 86.52
cents after ranging from 86 to 86.79 cents. It was also an
inside day with the range at 86 to 86.79 cents, versus
Wednesday's 85.96 to 87.18 cents trading range.
"Cotton is just biding its time," said Keith Brown,
president of commodity firm Keith Brown and Co in Moultrie,
Georgia. He said the market was waiting for a government crop
report next week and waiting for fresh leads.
Cotton was pressured partly by lower world stocks and a
decline in crude prices which took place before release of a
labor market report for April.
Analysts said the U.S. Agriculture Department's weekly
export sales data showed a net reduction of 25,200 running bales
(RBs, 500-lbs each). Shipments stood at 320,600 RBs, up 17
percent from the previous week.
The market will be turning its attention to the USDA's vital
supply/demand report, which accounts for the first estimate of
market conditions in the coming 2012/13 marketing season
(August/July).
Thursday's estimated volume was just under 10,200 lots,
almost 60 percent below the 30-day norm, according to Thomson
Reuters data.
Open interest stood at 183,117 lots as of May 2, ICE Futures
U.S. exchange data showed.