* Investor, specs buy ahead of government data
* Trade and mills bought steady at the lows
NEW YORK, March 21 (Reuters) - Cotton futures settled higher
Wednesday on mostly speculative and investor buying as players
adjusted positions ahead of the release of a government sales
report Thursday, analysts said.
The benchmark May contract on ICE Futures U.S. rose
0.41 cent to end at 88.31 cents per lb, dealing from 87.86 to
89.49 cents.
Volume traded Wednesday amounted to slightly more than
12,700 lots, slightly more than 50 percent under the 30-day
norm, Thomson Reuters data showed.
Mike Stevens, an independent cotton analyst in Louisiana,
said some of the buying may be in anticipation "of another good
export" report from the government.
U.S. Agriculture Department's weekly export sales report
will be released at 8:30 a.m. EDT (1230 GMT) Thursday.
The report is a gauge of demand for U.S. cotton and has
lately seen steady offtake of American fiber by China, the
world's top consumer of cotton.
Technically, the May contract traded above the 20-day moving
average at 89.15 cents but the advance was pared going into the
close.
Other moving averages used by many in the cotton trade such
as the 40-day moving average and the 55-day moving average sat
above the market at 91.20 and 92.76 cents, respectively, basis
the May, Thomson Reuters data showed.
Open interest,- an indicator of investor exposure, rose for
the 10th straight session to 188,724 lots as of March 20, the
highest since Feb. 14, ICE Futures U.S. data showed.
Investors appeared to be expanding short positions in
cotton, betting prices will fall due to rising supplies and
bloated cotton stocks, traders said.
Last Friday, the U.S. Commodity Futures Trading Commission
said net short positions in the cotton market stood at 7,553
lots, against a net long position of more than 14,000 lots at
the start of February.