* India's cotton export resumption still pressures U.S. July
cotton
* Dec cotton should stay in range until next USDA report

NEW YORK, May 1 (Reuters) - U.S. cotton futures scratched
out modest gains on Tuesday, as speculators bought the lows
after the previous session's rout, but analysts said prices
should remain in a holding pattern until the U.S. Department of
Agriculture's next supply/demand reading.
"Today is turnaround Tuesday," said Keith Brown at Keith
Brown and Co. brokerage in Moultrie, Georgia, noting steep
losses in the previous session after India announced it would
lift an export ban on its huge volumes of cotton.
July cotton on the ICE Futures U.S. exchange ended 28
cent higher at 89.68 cents per lb, after trading in a fairly
narrow range from 89.03 to 89.92 cents a lb.
Late-session volume came to 7,557 lots in the benchmark
contract.
Brown said the increase in July prices reflected traders'
desire to grab the fiber the day after prices fell to their
lowest levels in nearly two weeks, given the tight U.S. stock
levels estimated by USDA in its last supply/demand report.
Traders saw value a day after July cotton slid more than 2
percent on speculative selling after India's announcement.
On Monday, the world's No. 2 cotton producer said it would
allow cotton exports without any restrictions, lifting a ban
imposed last month to support domestic mills, but which hurt
India's farmers.
"Adding to the tragicomedy is USDA claiming India still has
a lot of cotton in warehouses," said Brown.
Traders sold heavily on Monday believing the sizeable new
supply from India would flood the global market.
"India will undercut U.S. prices, which will make it
difficult for U.S. prices to rise," said John Flanagan, analyst
at Flanagan Trading Corp in North Carolina.
New-crop December settled 0.02 cent lower at 86.94
cents, after trading in a band from 86.22 to 87.08 cents.
Analysts said December's losses reflected increased planted
acres, with Flanagan noting that the latest U.S. planting
progress report showed planted cotton acres reached 26 percent
by last week compared with average progress of 19 percent in
that same period over the last 5 years.
"We're not sure how many acres will get planted at this
cheap price," said Brown, adding that year-ago cotton prices
were $1.27 per lb that are currently running around 86 cents.
"Are the farmers going to plant fence-row to fence-row? No.
So, I think the market's in a holding pattern here and we'll
wait until the next USDA (acreage) report to decide whether to
go up or down," said Brown.
While farmers are planting cotton now, he said optimum
planting time lasts until mid-June so there is still time to
switch crops. With soybeans running around $14 to $15 a bushel
and dry conditions in many areas of the cotton belt, December
cotton plantings and therefore losses should be limited.
The U.S. Agriculture Department's monthly supply/demand
report due next week will show the first estimate of market
conditions in the coming 2012/13 marketing season (August/July).
Monday's trading volume was 25,268 lots, about 5 percent
over the 30-day norm, according to Thomson Reuters data.
Open interest fell by 1,814 lots to 180,668 lots as of April
30, ICE Futures U.S. exchange data showed.