* Export buying healthy after last week's steep price slide
* Mills rush to fix prices before Feb. 23 first notice day
* Tighter spreads attract additional buying

NEW YORK, Feb 15 (Reuters) - U.S. cotton futures
finished Wednesday with moderate gains, driven up as export
buyers continued to show interest after a recent steep price
decline and mills rushed to fix prices ahead of next week's
deliveries.
Since large speculative cotton players finished rolling out
of their March positions on Monday, the nearby contract was able
to rally on export and mill buying, which tightened their
spreads to later-dated issues.
The narrowing spreads drew other buyers into the market on
technical buying, helping to drive the price up to its highest
level since last Thursday's slide to lows last seen in late
December.
"You had good technical action, plus a pick up in export
interest at the lower levels that supported the market, and mill
fixations," said Mike Stevens, an independent cotton analyst in
Mandeville, Louisiana.
Benchmark March cotton on ICE Futures U.S. ended at
92.50 cents per lb, a 0.25 cent increase, after a session that
earlier lead prices up about 3.25 percent to their highest level
in a week. The range spanned 92.15 to 94.37 a lb.
The March tally rose to 11,698 lots shortly after exchange
trading finished.
Small speculators continued to roll long March positions
into May or July contracts ahead of the Feb. 23 delivery date.
May futures, which now hold the largest open interest
of any cotton contract on the board at nearly twice March,
finished at 93.48 per lb, up 0.64 cents
May volume stood at 14,023 in late business.
When prices slid last week, brokers said a slew of export
buyers were waiting to grab cotton at the lower levels.
"It goes back to last Thursday when we went back under 92
cents, there was a lot of export demand and buying that was
sitting down there," said Stevens, echoing other analysts.
Similarly, he said, "You had a rush, beginning Tuesday
afternoon, of mill fixation buying that came into the March
(futures) because they have to get everything done before first
notice day."
Finally, in late Tuesday trade, forward spreads started to
narrow dramatically, continuing to pull in when March futures
rallied on Wednesday. The December/March spread had traded as
wide as 150 points last week. But independent buyers of March
futures drove prices to within 8 or 10 points of May prices on
Wednesday morning, which attracted more buyers.
The spread to May widened back out to 92 points as March
came off its high. The Dec/March spread finished at 1.17 points.
Open interest in cotton, an indicator of investor exposure
in the market, increased by 943 lots to 189,670 lots as of Feb.
14 ICE Futures U.S. data showed.
On Tuesday, trading volume declined to 26,048 lots from
26,766 lots traded on Monday, exchange data showed.