* Players exit July day before delivery notices
* Trade and spec buying support key December

NEW YORK, June 22 (Reuters) - Cotton futures settled higher
Friday on speculative and trade buying as some players engaged
in last-minute liquidation of positions in the spot July
contract so they do not have to deliver against the board,
brokers said.
"The (spot) July contract is winding down. December had good
support," said Mike Stevens, a long-time cotton dealer in
Mandeville, Louisiana.
The spot July cotton contract on the ICE Futures U.S.
exchange fell the 4.00 cent daily limit, or 5.1 percent, to end
at 74.17 cents per lb.
On Tuesday, the contract rose the 5.00 cent daily limit to
settle at 87.98 cents in the highest close for the spot contract
since early May, Thomson Reuters data showed.
Key December rose 1.41 cents as well, or 2.08
percent, to finish at 69.12 cents per lb, moving from 67.38 to
69.88 cents. The rest of the board was up as well.
On Thursday, October closed at 67.71 cents in the lowest
settlement for the benchmark cotton contract since June 5. For
the week, the benchmark contract is down 2.67 percent.
Volume traded on Friday stood above 20,600 lots, about 15
percent under the 30-day norm, Thomson Reuters data showed.
Market players were disposing of positions in July, with
open interest in the contract falling 2,822 lots to 3,448 lots
as of Thursday, ICE Futures U.S. data showed.
Brokers estimate that 2,000 to 2,500 lots were liquidated on
Friday. Open interest in July should be less than 1,000 lots
when notices are issued.
Investors got out because they could not get their hands on
cotton to deliver against the board because most U.S. fiber has
already been harvested and sold, they said. Under exchange
rules, only U.S. cotton is deliverable at the exchange.
Thursday's volume hit 35,850 lots, from 42,145 lots in the
previous session, ICE Futures U.S. data showed.
Open interest in the cotton market, an indicator of investor
exposure, fell for the sixth session running and amounted to
167,347 lots as of June 21, the lowest since Jan. 26, exchange
data said. Open interest in cotton has fallen 16 percent over
the past six sessions.