NEW YORK, Jan 13 (Reuters) - New York Cotton futures finished Friday
with modest losses within their new higher range, with little news to move
prices in either direction and most investors keen to maintain steady positions
ahead of the long holiday weekend.

U.S. commodity and financial markets will be closed on Monday for the Martin
Luther King holiday.

Prices dipped early following bearish forecasts issued in the U.S.
Department of Agriculture's December supply/demand report on Thursday.

But prices were almost unchanged in late trade after bouncing just before
the close on buying by funds, who have been adding to positions all week to meet
commodity index reweightings.

Some estimates put the week's tally at around 12,000 lots for purchases
related to index rebalancing. All that ends this week.

'It is assumed that some of the strength this week has come from the
well-publicised index rebalancing that has produced end-of-the-day buying all
week. The phenomenon will be ending today, so it will be interesting to see how
the market fares next week without this buying,' said Mike Stevens, an
independent cotton analyst in Mandeville, Louisiana.

Benchmark March cotton futures settled slightly lower at 95.47 cents
a lb, a 22 cent loss, and held in a narrow range between 94.52 and 95.98 cents.

Earlier, it reached a high last seen on Nov. 18 at 97.50 cents.
The contract finished the week with minimal losses, but still in the middle
of the higher plateau carved out since the start of the year.

March volume was light at 9,745 lots, well below the previous session's
robust tally of 17,209 contracts.

Stevens and other cotton experts noted that cotton prices have held up
relatively well all week, defying factors that would typically spur selling.

'After rallying 12.50 cents, the market looked overbought and ripe for a
correction. Adding to bearish technical signals, the USDA's (bearish)
supply/demand reading, the soaring dollar, March cotton only lost 39 points for
the week,' Stevens noted.

'Cotton seems immune to anything that would normally bring sellers in. And
any declines have been fleeting,' he added.

Another medium-term bullish factor that helped support prices are weather
forecasts calling for dry conditions in cotton growing states. Further, cotton
experts have said the fiber will likely lose out to other crops like corn and
peanuts, which will eventually lifting cotton prices.

Total volume traded Thursday totaled 23,162 lots, greater than Wednesday's
count of 16,008 lots, ICE Futures U.S. data showed.

Open interest, an indicator of investor exposure, rose to 150,970 lots from
the previous tally of 149,509 contracts.