July 2 (Reuters) - ICE cotton futures edged higher, hitting a nearly four-month peak on Thursday as dry weather in top growing state Texas stoked crop damage concerns, although weak export sales data capped the natural fiber’s gains.
* The December contract , settled up 0.19 cent, or 0.3%, at 62.95 cents per lb. Prices earlier rose to their highest since March 9 at 62.98.
* For the week, the contract has gained 5.8%. Markets will be closed on Friday, a day ahead of the U.S. Fourth of July holiday which falls on a Saturday.
* The weather in Texas continues to be hot and dry, which could lead to higher crop abandonment, John Bondurant, a trader in Memphis, Tennessee said.
* Cotton prices have rallied since Tuesday’s federal acreage report showed estimated planted area for all cotton in 2020 was down 11% from last year, at 12.2 million acres.
* Limiting cotton’s gains, the weekly export sales data from the U.S. Department of Agriculture (USDA) showed net sales of 67,300 running bales (RB) for 2019/20 were down 35% from the previous week.
* Exports of 277,000 RB were down 12% from the previous week for period ending June 25.
* “While it (cotton) is still well below the 72 U.S. cents at which it began the year, it has gained considerable ground after having plunged to as low as 50 U.S. cents per pound at the start of the corona crisis,” Commerzbank analysts said a note.
* “On the other hand, the cotton price keeps being dampened by the uncertainty surrounding future demand trends, and above all surrounding the future of U.S.-Chinese (trade) relations,” the note said.
* The natural fiber has declined by about 11% so far this year after worldwide lockdowns to quell the spread of the novel coronavirus depleted demand.
* Total futures market volume fell by 9,087 to 25,416 lots. Data showed total open interest gained 5,297 to 166,778 contracts in the previous session. (Reporting by Sumita Layek in Bengaluru; editing by Grant McCool)