* Strong Chinese prices boost U.S. market

 * Weak dollar buoys fiber contracts

 * Index fund rolling eyed this week
 (Recasts, updates prices, market activity to U.S. close)

 By Rene Pastor

 NEW YORK, Nov 1 (Reuters) - U.S. cotton futures ended the
daily limit up on Monday as speculative funds and investors
bought aggressively due to strong cotton prices in China and
early weakness in the dollar, analysts said.

 Cotton hit its session high early as the dollar slid and
stayed there even as the U.S. currency firmed against the euro
and yen after stronger manufacturing data, though those gains
in the dollar were fleeting. Currency markets are bracing for
more monetary easing from the Federal Reserve this week.
[FRX/]

 A weaker dollar normally boosts commodities because most
are denominated in the greenback. Cotton also enjoys strong
fundamentals: tight stocks and strong mill demand.

 The benchmark December cotton contract CTZ0 increased
the 4.00-cent daily limit to finish at $1.2926 per lb. The
session low was at $1.258.

 The total amount traded was slightly below average. Cotton
volume reached 24,000 lots, about 7 percent below the 30-day
average of 26,000 lots, Thomson Reuters preliminary data
showed.

 In China, the Zhengzhou Commodity Exchange's May cotton
contract CCFK1 last traded on Monday at 28,510 yuan per
tonne, having hit a lifetime peak of 28,585 yuan.

 "The Chinese are the main drivers here," said Ron Lawson,
cotton expert at commodities brokerage logicadvisors.com in
Sonoma, California. "We haven't seen enough demand destruction
(in cotton)."

 "(The) lower U.S. dollar and sharply higher prices in China
are feeding the bull this morning," Mike Stevens, an
independent cotton analyst in Louisiana, said.

 Analysts noted that the bulk of the U.S. cotton harvest has
already been sold, another factor that has buoyed prices. The
United States is the world's biggest cotton exporter.

 Zhang Hongzhou, analyst with Galaxy Futures Ltd, said
China's cotton mills had been booking orders of U.S. cotton,
with signed imports of more than 1.0 million tonnes for next
year.

 "The U.S. has sold most of its cotton, there is no reason
for prices to fall. Many (domestic) cotton mills have signed
for forward-month cargoes because near-month supply is very
tight," Zhang said.

 Lawson estimated that 80 percent of the U.S. cotton crop
estimated at 18.87 million (480-lb) bales has been sold.

 Cotton is the biggest gainer in the Reuters-Jefferies CRB
commodity index in the year to date, rising nearly 65 percent
-- higher than more widely followed commodities such as gold or
the grain market's heavily traded corn futures. (Graphic:
link.reuters.com/kew48n )

 While fundamentals in cotton are bullish, Lawson said other
factors in the futures market may have an impact.

 For one, analysts said, the market expects the Fed to
announce on Wednesday a new round of government debt purchases,
or "quantitative easing" which would flood the U.S. economy
with money in an attempt to spur growth.

 They said the other factor which could affect cotton
futures would be if investment funds adjust their positions in
cotton.

 Lou Barbera, a cotton expert at brokerage VIP Commodities,
said the market focus would soon turn to the rolling by index
funds of positions out of spot December and into back months.

 Cotton hit a record in October, rising more than 20 percent
that month and nearly 80 percent since the start of the rally
in July.

 October's gains were unprecedented, traders said. Some
believe such a rally will never be repeated.

 Keith Brown, president of commodity firm Keith Brown and
Co. in Moultrie, Georgia, said high cotton prices had "allowed
farmers to (sell) cotton at prices they have never seen or
their granddaddies have never seen and they will never see
again".
PRICES AS OF 1508 EDT (1908 GMT)

    SETTLE     NET    PCT     LOW    HIGH  CURRENT

              CHNG   CHNG                      VOL
CTZ0   129.26    4.00   3.2%  125.80  129.26   10,340
CTH1   124.45    4.00   3.3%  121.01  124.45    7,228