* Greek debt package helps cotton, other commodities
* Late selling in March contract ahead of Feb. 23 notice day

NEW YORK, Feb 21 (Reuters) - Most U.S. cotton futures
settled higher on Tuesday, rallying with other commodities,
especially crude oil, and the euro as investors found relief
from European officials' agreement to a debt bailout deal for
Greece.
Euro zone finance ministers agreed to a 130 billion-euro
($172 billion) rescue package for Greece to avert an impending
default, after forcing Athens to commit to unpopular cuts and
private bondholders to take bigger losses.
The complex deal wrought in overnight negotiations gives
breathing room to investors seeking to add risk and arrived as
the U.S. cotton market reopened with other commodities after
being closed Monday for the U.S. Presidents Day holiday.
The euro rose to nearly two-week highs against the dollar on
investor relief from the Greek debt plan, which helps cotton
firm in overseas markets.
"The Greek financial bailout went through and financial
markets are experiencing a relief rally," John Flanagan, broker
at Flanagan Trading Corp in North Carolina.
New benchmark May futures on ICE Futures U.S. closed
at 92.97 per lb, up 0.32 cent. Despite the buying interest, May
futures established an inside range for the day, meaning a
higher low and a lower high, moving from 92.46 to 93.79.
The session low continued to hold within the parameters of
an uptrend line that began at the Dec. 14 bottom at 84.23.
May volume came to a robust 12,719 lots shortly after the
exchange session finished.
March cotton edged lower heading into the close,
finishing down 0.20 cent at 91.25 cents per lb. It was the
lowest close since Feb. 10.
The trading range ran from 91.12 to 92.24 per lb. March
volume came to 7,467 lots, as more players exited their
positions ahead of the delivery period for the contract.
The nearby March contract also lost ground to players
exiting their positions as the Feb. 23 delivery date approaches.
"Today, the only sellers were from the final liquidations of
March contracts before delivery," said Mike Stevens, an
independent cotton analyst in Mandeville, Louisiana.
As of Feb. 17, May's open interest rose to 88,457 lots and
March dropped to 12,475 lots first notice day for March
approaches on Feb. 23.
A surge in crude oil prices to their highest settlement in
nine months, also gave cotton a psychological boost.
"Psychological help, because most synthetic fibers are made
from petroleum products," said Stevens.
Synthetic fibers compete with cotton in fabric content.
Down the road, some analysts think cotton may fall, with
many supply/demand factors arguing for a bearish turn in prices.
In China, a think tank said the country's cotton prices may
face pressure at the end of March once the government concludes
its purchases of the crop, citing weak demand.
India's cotton prices are expected to fall this week on a
drop in overseas demand as buying from China has slowed and
demand from Bangladesh suffered as textile mills there are
facing financial problems. China and Bangladesh are the top two
buyers of Indian cotton.
Open interest in cotton, an indicator of investor exposure,
declined by 3,792 lots to 178,666 lots as of Feb. 17 ICE Futures
U.S. data showed. On Friday, volume rose by 4,169 lots to
24,163 lots from Thursday's tally, exchange data showed.