Feb 22 (Reuters) -U.S. cotton extended gains on Thursday on technical support, while an upbeat sentiment across the wider markets also helped the natural fibre.

* Cotton contract for May CTc2 rose 1.15 cents, or about 1.2%, to 94.38 cents per lb by 11:20 a.m. ET (1620 GMT).

* "Technicals doing a good bit of it and tomorrow's first notice day on the March contract. You still have a few stragglers out there that have to fix the March contract, so I'm sure that's supporting things just like it did yesterday," said Jim Nunn, owner of Tennessee-based cotton brokerage Nunn Cotton.

* Extending support, Chicago grain futures rose as traders covered short positions, with corn edging higher after hitting its lowest level since November 2020 in the previous session. GRA/

* "I can't see how they could be a big number tomorrow. Let's hope shipments pick up," Nunn added referring to the U.S. Department of Agriculture's (USDA) export sales report due on Friday.

* Further helping cotton the benchmark S&P 500 index briefly hit a fresh record after Nvidia's stellar results. .N

* Oil prices steadied as a big rise in U.S. crude inventories offset the supportive impact of another attack on shipping near Yemen. O/R

* Higher oil prices make polyester, a cotton substitute, more expensive.

Reporting by Rahul Paswan in Bengaluru; Editing by Shailesh Kuber