* World Bank warns on slowing Chinese economic growth
* Rain in west Texas may damage some crops
* Specs switch to net short - CFTC data
NEW YORK, Oct 8 Cotton prices were flat to
slightly higher on Monday as speculative short covering and a
buoyant grains market offset concerns about slowing growth in
China, the world's largest textile market.
New York cotton for December delivery settled up 0.41
percent at 71.78 cents per lb on ICE Futures U.S., moving off
intraday highs after briefly piercing the 72-cent mark.
Fibers may be prone to more short covering after speculative
investors raised their bearish bets ahead of the U.S. harvest.
In the week to Oct. 2, they switched to a net short position
for the first time in two months, Friday's data showed.
Oil led the broader commodities market lower amid concerns
that slower economic growth in China and the debt crisis in
Europe will curb demand.
Fears were raised after the World Bank cut its economic
growth forecasts for East Asia and the Pacific region and said
there was a risk the slowdown in China could be deeper and more
prolonged than expected by many analysts.
The Thomson Reuters-Jefferies CRB index, a global
benchmark for commodities, was down 0.5 percent. The euro was
also under pressure due to uncertainty over the timing of a
possible bailout of Spain.
In cotton, the market was awaiting the U.S. Department of
Agriculture's monthly report due on Thursday for any signs of
damage to new crops in west Texas, the major U.S. growing
region, after recent wet weather.
Rains can damage quality and quantity of crops because most
bolls, which are the protective capsule surrounding the fiber,
are open this far into the season.
It may be too early for the USDA to adjust its output
forecasts yet though and any cuts due to wet weather are
unlikely to dent the global record inventory of over 76 million
bales in the current season to end-July 2013 either.
INTL FCStone chief economist, fibers and textiles, Gary
Raines said he expects the government to keep its forecast for
U.S. output unchanged at 17.1 million bales, waiting until
November to pare back its estimate due to the heavy rains.
"While unwelcome showers drenched open bolls across West
Texas and parts of the Mid-South over the last week and a half,
cotton in other parts of the region along with much of the
Southeast are doing well," he said.
In particular, South Carolina, Georgia, and Virginia are
likely to produce the biggest harvests in years, while yields in
Georgia's crop may rise to a record, well in excess of 920 lb
per acre, he said.
U.S. mill consumption forecasts will be flat from September
at 3.4 million bales, he said, although he has cut his U.S.
export forecast by 200,000 bales to 11.6 million due to lower
consumption from China, where the government is expected to
restrict imports over the next three months.
"China's recent decision to suspend cotton imports for the
remainder of 2012 effectively squelches demand from America's
largest customer of cotton, hinting 2012/13 US exports could
finish the marketing year perhaps much lower than this target,"
(Reporting by Josephine Mason; editing by Gunna Dickson)