ICE cotton was little changed and range-bound on Wednesday, supported by a sense of tightening US supplies but capped as signs of slowing economic growth in China stirred worry of reduced demand from the world's top textile market. The benchmark December cotton contract on ICE Futures US closed up 0.07 cent, or 0.08 percent, at 85.74 cents a lb.

Prices were underpinned by a sense that US supplies may be tight in the new crop year that begins on August 1 as exchange stocks fell to a more than five-month low and as the new crop is expected to be late following unfavourable planting and growing weather earlier in the season in the world's top exporter, dealers said. Gains were limited by slow mill buying and worry over a potential economic slowdown in China, the biggest consumer of many raw materials, as data showed the Chinese manufacturing sector contracted for a third straight month, dealers said.

"The crop is going to be late, and there continues to be this belief that December prices can go higher. Nobody wants to go home short," said Jobe Moss, a broker with MCM Inc in Lubbock, Texas. Certified stocks totalled about 252,000 bales, according to the most recent ICE data, the lowest level since February and down steeply from over 600,000 bales at the start of the month. The big drop was largely expected following the largest July ICE delivery in at least five years.

Falling exchange stocks and expectations of a late crop have stirred concern among cotton bulls that nearby supplies could be tight if demand picks up. Cotton futures have been trapped in a range of about 83 cents to about 88 cents, as traders manage expectations of record global inventories and a sense of relatively tight supplies outside of China.

Global inventories are forecast to reach a record of 94.34 million 480-lb bales by the end of July 2014. More than 60 percent expected to become part of China's stocks, the result of a government stockpiling program launched in 2011. "Basically, we've got two markets. If you take China out of the market, we're a fairly tight market," Moss said. "But if China starts to release quickly out of their stockpile, everything can change in one moment."