NEW YORK, Dec 1 (Reuters) - U.S. cotton futures finished
Wednesday the daily limit up on speculative fund buying
inspired in part by tight supplies that could boost values in
the coming sessions, analysts said.

The key March cotton contract rose the 4-cent limit
to finish at $1.2134 per lb, with the session low at $1.169. It
was the highest close for the second-position cotton contract
in over a week, according to Thomson Reuters data.

Cotton is the second best performer on the
Reuters-Jefferies commodity index, having risen over 60 percent
year to date. (Graph: http://link.reuters.com/kew48n)

Supplies of cotton remain tight while demand should remain
strong going forward, said Ron Lawson, cotton specialist at
logicadvisors.com in Sonoma, California.

'The pipeline is so empty there is no buffer,' he said.
'It's tighter now than it was (in the) summer.'

Technically, he said cotton futures have recovered after
falling sharply from the highs seen last month when the spot
cotton contract hit an all-time record of $1.5723 on Nov. 10.

The volume traded though was light, with the total standing
at around 13,500 lots, two-thirds below the 30-day average of
about 36,700 lots, Thomson Reuters preliminary data showed.

Chinese cotton prices remained firm, with the May cotton
futures on the Zhengzhou Commodity Exchange last traded
on Wednesday at 25,300 yuan per tonne, up 395 yuan for the
session.

Traders said market participants will now look toward the
U.S. Agriculture Department's weekly export sales report on
Thursday.

The report is used by the trade to gauge demand for U.S.
cotton, especially during the four-month long rally that
hoisted fiber prices to their highest level since the U.S.
Civil War in the 19th century.

Cotton brokers said they expect total U.S. cotton sales to
reach around 200,000 to 300,000 running bales (RBs, 500-lbs
each), from 311,800 RBs in last week's USDA report.

Analysts said expectations that excessive rains in India
could trim anticipated exports of 5.5 million bales meant the
supply situation could get even tighter going into 2011.

The focus of the market will soon turn to prospective
cotton plantings, especially in the United States, for 2011.

Analytical firm Informa Economics has already raised its
U.S. cotton plantings forecast in 2011 to 12.2 million acres,
which would be a four-year high and up nearly 12 percent from
2010 cotton sowings of 10.909 million acres.