Cotton futures ease in light volumes as buyers sit on sidelines

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* Prices hit session lows after U.S. Fed statement

* Volumes plunge this week to the lowest since Dec. -ICE data

* Weekly exports above 50,000 bales would be bullish -traders

NEW YORK, March 19 (Reuters) – Cotton futures drifted lower on Wednesday in thin volumes, pressured by weak mill demand, traders said.

The most active May cotton contract on ICE Futures U.S. slipped 0.31 cent, or 0.3 percent, to close at 92.62 cents a lb.

Investors were cautious throughout much of the session ahead of comments from the U.S. Federal Reserve.

Cotton prices extended losses and major indexes hit session lows after a 2 p.m. EDT Fed statement that showed the central bank trimmed its monthly bond-buying.

Commodities markets were mixed, and the bellwether Thomson Reuters/Jefferies Core Commodity CRB index edged lower.

Worries over growth in China, the world’s top consumer of many raw materials including cotton, pervaded markets and the yuan tumbled to a near one-year low.

Cotton prices have withstood pressure from uncertainty over China’s economic growth, as tight U.S. supplies have driven buying and lifting prices last week as high as 93.75 cents a lb, the strongest levels since mid-August.

“The market is in a wait-and-see pattern. The trade is sitting on the sidelines because mills aren’t interested in buying,” said Chris Kramedjian, a risk management consultant for INTL FCStone in Nashville, Tennessee.

Trading volumes plunged in the first two days of the week to some of the lowest levels since late December, ICE data showed on Wednesday.

Dealers awaited weekly U.S. government export data due on Thursday, with expectations rising that the market could again see large cancellations due to the high prices.

Weekly sales above 50,000 bales would beat expectations and be bullish for prices, traders said.

Last week’s report showed that buyers in Turkey and Vietnam, two of the two consumers of U.S. cotton, canceled previously booked bales, stoking worries of more to come if prices linger above 90 cents a lb. (Reporting by Chris Prentice; Editing by Stephen Powell)

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