March 1 (Reuters) -U.S. cotton futures traded limit down on Friday, marking their worst day in over seven months as the cotton market corrected an overbought tone.

* Cotton contract for May CTc2 fell 4 cents, or about 4%, to trade limit down at 95.57 cents per lb by 10:30 a.m. ET (1530 GMT). It registered its biggest daily percentage loss since July 2023.

* The contract scaled its highest in over a year on Feb. 28 and was up about 2.2% so far this week.

* Speculators raised net long position by 10,214 contracts to 67,851 contracts in ICE U.S. cotton futures in the week of Feb. 20. CFTC/

* The market is kind of correcting itself (on Friday) after we have had a couple of limit up sessions and a very strong uptrend, said Bailey Thomen, cotton risk management consultant at StoneX Group.

* The U.S. Department of Agriculture (USDA) showed net sales of 40,000 running bales for 2023/2024 were down 69% from the previous week and 83% from the prior 4-week average. EXP/COT

* In the grain market, Chicago soybeans inched higher with the market recovering from last session's three-year low, although large South American supplies and lacklustre demand for U.S. cargoes are expected to curb the upside potential in prices.GRA/

Reporting by Anushree Mukherjee in Bengaluru; Editing by Shailesh Kuber