* May open interest drops by nearly half
* China's cotton acreage seen falling in 2012

NEW YORK, April 19 (Reuters) - Cotton futures closed mostly
higher for the third straight session Thursday on investor
buying as positions in the spot May contract were liquidated
ahead of first notice day for deliveries next week, analysts
said.
The July cotton contract on the ICE Futures U.S.
exchange rose 0.70 cent to finish at 90.72 cents per lb, dealing
from 89.70 to 91.41 cents. It was an inside day as that range
held within Wednesday's 88.24 to 92.25 band.
On Monday, the market closed at its lowest since March 20,
according to Thomson Reuters data.
On a benchmark basis, the spot contract has remained trapped
in a range between 87 and 94 cents since the start of March,
Thomson Reuters data showed.
Thursday's estimated volume was near 19,500 lots, about a
fifth under the 30-day norm, according to Thomson Reuters data.
"It's a pretty quiet day. May is dying a natural death,"
said Mike Stevens, an independent cotton analyst in Louisiana.
Open interest in the May contract sank 6,790 lots to 7,396
lots as of Wednesday, and brokers said the trading house trying
to liquidate its position had managed to do so.
The European trading house was said to have paid a stiff
price to get out of the May, the dealers said.
The back months, especially new-crop December, got
support from news that Chinese cotton sowings in 2012 may fall 4
percent, according to a survey by the country's Agriculture
Ministry.
The China Cotton Association has said it expects cotton
acreage to drop by 16.7 percent.
Open interest amounted to 184,636 lots as of April 18, the
lowest since March 15, ICE Futures U.S. exchange data showed.