* Cotton players scramble to cover shorts in July
* Market eyes Tuesday release of USDA supply data
June 11 (Reuters) – Cotton futures finished mixed Monday, with robust investor buying lifting the spot July futures as players sought to cover shorts and liquidate their positions before the contract goes into delivery later in the month, analysts said.
“It was all the July/December spread,” Mike Stevens, an independent cotton analyst in Mandeville, Louisiana, said of the main feature in cotton trading on Monday.
The now benchmark December cotton contract on ICE Futures U.S. fell 0.59 cent, to close at 69.29 cents per lb, dealing between 68.30 and 70.60 cents.
Spot July cotton rose 2.19 cents, or 3 percent, to finish at 75.09 cents a lb, moving from 73.27 to 75.74 cents.
Cotton’s 14-day relative strength index reading, an indicator of a market’s being oversold or overbought, stood at 37.5.
A reading of 30 or lower means the market is oversold and one of 70 or above indicates a market is overbought.
Traders said talk was rife that a cotton market investor was trying to scramble out of a short position and was forced to bid up July as a result.
“That firm was holding an uncomfortable short position with first notice day coming up so they had to get out,” one said.
The market is now looking toward the release on Tuesday of the U.S. Agriculture Department’s monthly supply report to see if the government will raise its estimate of world 2012/13 cotton ending stocks. Last month, it pegged stocks at a record 73.75 million (480-lb) bales.
Open interest, an indicator of investor interest, amounted to 198,526 lots as of June 8, exchange data showed.
Volume on Monday reached almost 49,400 lots, more than double the 30-day norm, Thomson Reuters data showed. (Reporting by Rene Pastor; Editing by Bob Burgdorfer)