NEW YORK, Sept 28 (Reuters) - Cotton futures settled lower Wednesday on
investor sales as the market was again pinned in a trading band with
players reluctant to take positions in fiber contracts given the debt woes
in Europe, analysts said.

The key December cotton contract on ICE Futures U.S. eased 0.62
cent to finish at 99.53 cents a lb, dealing between 99.16 cents and $1.01.
For the fourth session in a row, the market basically stayed in a range
running from 99 cents to $1.02.

Tuesday's range was 99.50 cents to $1.0218, Monday's range was 99.52
cents to $1.023 and the Friday band was at 99 cents to $1.02.

Total volume traded Wednesday hit almost 8,500 lots, around a third
below the 30-day norm, preliminary Thomson Reuters data showed.

'It's the same tiny range in cotton,' said independent cotton analyst
Mike Stevens in Mandeville, Louisiana.

'We're trapped between spec selling and trade buying, but there's
nothing aggressive,' he added.

Merchants were reluctant to sell cotton because of worries that drought
in Texas, the biggest cotton growing state in the country, has hurt the
quality of U.S. fiber.

The market is still firmly capped at the $1.04 to $1.09 area, but mills
and commercial accounts seem eager to book orders under the psychological
$1 mark.

Stevens said the market will be looking closely at the U.S. Agriculture
Department's weekly export sales report to see if export orders for U.S.
cotton are canceled anew. The report is due out at 8:30 a.m. EDT (1230 GMT)
on Thursday.

The amount of investor interest in cotton remained weak as open
interest stood at 147,611 lots as of Sept 27, up slightly from 146,985 lots
on Sept 23, the lowest level since Aug 29, the exchange said.

In fact, the U.S. CFTC said speculators cut their net long position in
cotton to 26,937 lots, the lowest since June.

Total volume Tuesday amounted to 11,154 lots versus the previous
session's tally of 12,568 lots, ICE Futures U.S. data showed.