* USDA projects record ending stocks for 2012/13, 2013/14 crops
* USDA expects China to take much of the excess world supply
* USDA estimates U.S. 2013/14 crop at 14 mln, low end of range
NEW YORK, May 10 (Reuters) - Cotton futures sank on Friday following the U.S. government's monthly supply/demand series that revealed its projections for a jump in the record amounts of excess supply to be carried over at the end of the current crop year as well as the next.
But analysts pointed out that much of the increase the U.S. Department of Agriculture is forecasting for next year's ending stocks was expected to go to China, leaving a shortage in cotton inventories for the rest of the world.
"Prices came off for two good reasons. One, they showed that world consumption only increased a little bit, but world ending stocks went up a lot for the 2013/14 year," said John Flanagan at broker Flanagan Trading.
"That's quite bearish," he added, noting, however, that China was expected to continue buying cotton for its reserves.
USDA projected that China would end up with 58 million 480-lb bales in reserves, nearly two-thirds of the 92.7 million forecast for total world ending stocks in 2013/2014.
"That's an ameliorating factor, but there's always the risk that China just changes their mind and they could crush cotton prices at any day," Flanagan said.
Most-active ICE Futures U.S. July cotton ended down 1.44 cents, at 86.48 cents per lb, a near 1.5 percent loss, falling from one-month highs seen in the two previous sessions.
Cotton prices dropped sharply after the noon (1600 GMT)release by the USDA, which showed the department's projected increase in world ending stocks for next year to be 92.74 million 480-lb bales, far higher than the record 84.78 million bales expected in the current marketing year and above many analysts' expectations.
"It is a shocker," said Knight Futures cotton specialist Sharon Johnson.
USDA added 2.33 million bales to its world ending stocks outlook for the 2012/2013 crop due to increased Chinese imports.
For next year's U.S. crop, USDA forecast a low 14 million 480-lb bales, which analysts said they thought would almost certainly be revised upward.
"The USDA has put in a very low (2013/14 production) number and I'm not sure the market is convinced of that. Seeing a crop like that would require a weather disturbance and I think the weather is going to improve," said Sterling Smith, futures specialist at Citigroup in Chicago.
Flanagan said the low crop estimate was based on the 10 million acre prospective planting figure that came out in March.
"Since then, I think it's pretty well assumed that there will probably be another 1 million to 1.5 million acres planted. That would certainly increase the U.S. crop to more than that," he said, referring to next year's 14 million bale crop estimate.
The agriculture department's production estimate for the 2012/2013 U.S. crop year sits at 17.32 million bales.
Smith said he expects prices "will churn sideways in a range until the USDA's next report," which should paint a clearer picture of planted acres.
Weather has been a dominant factor delaying farmers ability to get their crops in the ground, with either too little rainfall, as in Texas, the largest growing state in the United States, or too much rain, as in the U.S. Southeast cotton region.
Competing crops, like corn and soybeans, have also been affected by erratic weather conditions, which could cause some farmers to switch acres to cotton. (Reporting by Carole Vaporean; Editing by Tim Dobbyn)