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Cotton prices gain on U.S.-China trade deal hopes

July 2 (Reuters) - ICE cotton futures rose on Tuesday as optimism on a prospective trade truce between Washington and Beijing and uncertainty around the crop condition lent further support to the natural fiber.

* The most-active cotton contract on ICE Futures U.S., the

third-month December contract , was up 0.37 cent,

or 0.56%, at 66.95 cents per lb as of 1:48 PM EDT (1548 GMT).

* It traded within a range of 65.70 and 67.70 cents a lb.

* "There is bit more optimism that we will (U.S.) get back to trade normally (with China) and that's probably going to happen. It's just a matter of time," said Sid Love, commodity trading adviser at Kansas-based Sid Love Consulting.

* The active contract rose as much as 3% in the previous session to touch its highest in a month at 68.35 cents per lb, after U.S. President Donald Trump said Beijing has agreed to buy U.S. farm products and resume trade talks.

* However, he also said on Monday that any trade deal with China would need to be "somewhat tilted" in favor of the United States.

* "Demand for U.S. exports has been soft in recent weeks due, in part, to a lack of Chinese buying - hence this recent headline has inspired some confidence in the market, despite nothing material being announced," Charles Clack, an analyst from Rabobank Australia & New Zealand Group said.

* The United States is one of the biggest producers of the natural fiber, while China is the largest consumer.

* Meanwhile, the U.S. Department of Agriculture's (USDA) crop progress report on Monday showed that only 52% of the crop was in good/excellent condition, while 18% of the natural fiber was in poor/very poor condition.

* "Looking at the condition of the crop it is not bad but it's not great either. I have never seen a crop like this in all those years and as a result there is more uncertainty," Sid Love added.

* Total futures market volume fell by 8,765 to 21,922 lots. Data showed total open interest fell 12 to 175,746 contracts in the previous session.

* Certificated cotton stocks <CERT-COT-STX> deliverable as of July 1 totaled 74,351 480-lb bales, down from 76,992 in the previous session.

(Reporting by K. Sathya Narayanan and Nallur Sethuraman in Bengaluru Editing by Chizu Nomiyama)