* Investment fund roll puts cotton on defensive
* Trade awaits USDA crop report Thursday
* Industry group NCC hands out planting survey Friday
NEW YORK, Feb 8 (Reuters) – Cotton futures finished lower on Wednesday ahead of a government crop report on Thursday as major funds moved positions out of the spot month and into back contracts, analysts said.
Benchmark March cotton on ICE Futures U.S. declined 0.95 cent, or 1 percent, to finish at 93.62 cents per lb, dealing from 93.52 to 95.79 cents.
The roll by investment funds put pressure on fiber contracts although possible consumer and commercial buying seemed to emerge in the March contract near 93 cents, traders said.
Cotton market players were also tweaking positions before release of the U.S. Agriculture Department’s monthly supply/demand report on Thursday at 8:30 a.m. EST (1330 GMT).
They said market participants will be looking for possible reductions in USDA’s estimate for U.S. 2011/12 cotton production, which the government last month pegged at 15.67 million (480-lb) bales.
Other possible changes could include adjustments for world consumption.
Mike Stevens, an independent cotton analyst in Louisiana, said there could be “room for a surprise” in the report especially since expectations in the market are for no major changes at this time.
The trade is also awaiting an annual survey by the National Cotton Council on potential U.S. cotton plantings this year, which is due out on Friday after the market closes at 2000 GMT.
A Thomson Reuters survey in January showed American farmers are expected to reduce 2012 cotton plantings by some 10 to nearly 12 percent to around 13.002 million-13.242 million hectares.
Open interest in cotton , an indicator of investor exposure in the market, rose to 189,435 lots as of Feb. 7, the highest since the middle of April last year, ICE Futures U.S. data showed.
Volume traded on Wednesday was more than 30,000 lots, more than double the 30-day norm, Thomson Reuters data showed.
On Tuesday, volume hit 36,455 lots, the highest since Jan. 9, exchange and Thomson Reuters data showed.
(Reporting by Rene Pastor; Editing by Bob Burgdorfer)
Source: http://www.reuters.com/article/2012/02/08/markets-cotton-idUSL2E8D8DYR20120208
