NY cotton ends up as shorts scramble out of July

* Players pressured to cover shorts in July contract
* China's cotton purchases shoot up in USDA report

NEW YORK, June 14 (Reuters) - Cotton futures closed higher
Thursday on active short covering in July ahead of deliveries
that begin on June 25, analysts said.
The spot July cotton futures climbed the 3.00 cent
daily limit to close at 78.09 cents per lb. The session low was
74.66 cents.
The key December cotton contract on the ICE Futures
U.S. exchange rose 0.19 cent to finish at 70.60 cents per lb,
dealing from 70.01 to 73.08 cents.
The spread between July and December is at its widest since
June 2011, according to Thomson Reuters data. Volume traded on
Thursday reached over 47,300 lots, almost double the 30-day
norm, it said.
Market participants said a large cotton trading house has
put pressure on players holding short positions in July to exit
those positions.
"They did not give the other side a chance to roll out and
this is forcing those who are short in July to buy and cover
their shorts," a long-time trader said.
Trading is normally intense in the cotton market in the
run-up to the first notice day for deliveries. The notice day
for the July contract is on June 25 and most investors or
speculators would want to avoid delivering cotton against the
contracts.
The U.S. Agriculture Department's weekly export sales report
showed China bought 744,200 running bales (RBs, 500-lbs each) of
upland cotton, some 94 percent of the total 795,700 RBs sold in
the last week.
Open interest in the cotton market, an indicator of investor
interest, amounted to 195,136 lots as of June 13, ICE Futures
U.S. exchange data showed.

(Reporting by Rene Pastor; Editing by Bob Burgdorfer)