* Market rally shows no sign of slowing down

 * USDA report, Chinese buying stoke surge

 NEW YORK, Oct 11 (Reuters) - Cotton futures powered Monday to a fresh
15-year high on renewed investment fund and Chinese mill buying as the
market's rally showed no sign of easing anytime soon, analysts said.

 "The Chinese came back and they have to play catch up," said Lou
Barbera, an analyst for VIP Commodities brokerage.

 Traders said the bulk of the early buying came from mills in China
chasing the market higher and speculators betting cotton would still post
gains due to strong consumer demand.

 ICE Futures U.S. benchmark December cotton contract CTZ0 rose 3.21
cents to trade at $1.1038 per lb at 8:56 a.m. EDT (1256 GMT), having hit a
fresh 15-year high of $1.1075.

 VIP Commodities said in a report that "the hunger for physical cotton
is still there. China has been pretty active in the physical market and it
seems also in the futures market as well. The textile mills are still in
need of cotton and the reports are confirming this."

 U.S. cotton export sales have hit more than 3.3 million (480-lb) bales
in the last four weeks, with Chinese buying of upland cotton in 2010/11
alone amounting to nearly 1.0 million bales.

 The U.S. Agriculture Department's monthly supply/demand report last
Friday underscored the increasingly tight cotton situation in China, the
world's biggest producer and consumer of cotton.

 USDA sliced its estimate of China's 2010/11 cotton production by 1.0
million bales to 31.5 million, upped their Chinese import forecast to 13
million bales from 12.75 million and dropped its ending stocks forecast to
14.72 million from 16.01 million bales.

 Open interest in the cotton market has remained above 231,000 lots
since mid-September and stood at 232,123 lots as of Oct. 7, ICE Futures
U.S. data showed. The next update will be released later on Monday.