NEW YORK, July 20 (Reuters) - Cotton futures settled
fractionally lower Wednesday on investor sales as the trade
cautiously eyed attempts to resolve the debt crisis in the
United States and Europe in the days ahead, analysts said.

The market is looking toward an EU summit on Thursday to
ease the debt woes of Greece and is hopeful a compromise would
avert a U.S. debt default in August.

Brokerage Penson Futures senior cotton analyst Sharon
Johnson said there is 'some nervousness about the (EU) meeting'
to talk of a debt crisis which could plunge global economies
into another recession.

The key December cotton futures on ICE Futures U.S.
slipped 0.09 cent to conclude at $1.0075 per lb, trading from
97.82 cents to $1.0213.

On Monday, the contract finished at 96.46 cents in the
lowest close for the second-position contract since early
October 2010, Thomson Reuters data showed.

Business was light. Total market volume hit around 14,300
lots at 2:49 p.m. EDT (1849 GMT), about a quarter below the
30-day norm, Thomson Reuters preliminary data showed.

The short-covering seen in the preceding two sessions
fizzled out during Wednesday's session although losses were
pared by late covering in the market.

'(Investors) kind of let up on the pedal because there was
no follow-through (buying),' Johnson said.

World stocks, with the exception of Wall Street, and the
euro gained Wednesday on guarded optimism a debt deal will be
reached in Europe and the United States.

Traders said the market will also look closely at the
weekly export sales report of the U.S. Agriculture Department
to gauge the level of demand for the fiber.