* Spot prices finish higher for the first in 14 sessions
* Cotton up as much as 4 pct to 78.94 cts before pares gains
* US govt export data eyed for signs of renewed demand
NEW YORK, Nov 6 (Reuters) - Cotton futures surged on Wednesday, gaining for the first in fourteen sessions and stemming a historic rout, as bargain-hunting and technically-driven buying lifted fiber off ten-month lows.
The most-active December cotton contract on ICE Futures U.S. rallied as much as 4 percent to 78.94 cents a lb before paring gains and closing up 1.13 cents, or 1.5 percent, at 77.07 cents a lb.
It was the spot contract's biggest daily gain since mid-August.
The rally cut cotton's longest string of losses since at least 1980, according to data compiled by Reuters.
Fiber pulled back from the day's steepest gains as they approached 79 cents, as rumors continued to circulate that China may soon begin auctioning supplies from its massive state reserves.
Prior to the rally, the spot contract was the most oversold it had been since 2012.
"We're seeing business at these levels. We saw some bottom-picking over the last couple days, but we saw some defending of short positions ahead of the close," said U.S. broker.
The close above 77 cents was seen as technically bullish, standing to reverse a trend for cotton prices teetering on the brink of bear territory.
As prices hit technical and psychological support near 75 cents a lb on Tuesday, buying picked up on short-covering and bargain-hunting at "cheap" prices.
Options-related dealings ahead of Friday's December options expiration drove some of the day's buying, traders said.
Mill buying has picked in recent weeks as tumbling prices reignited demand. Prices are down 18 percent from August highs near 94 cents.
U.S. government export data was due on Thursday, avidly eyed by dealers for signs of strong demand, particularly in the world's top consumer China.
Traders braced for volatility on Friday, with volumes expected to be heavy due to the U.S. monthly crop report, options expiration, and index fund roll.
Exchange stocks climbed to 172,000 bales on Tuesday, the most since July, according to the most recent ICE data.
Traders said in October they expected certified stocks to climb to at least 150,000 to 200,000 bales, easing supply concerns and throwing the market into a contango for the first time in months. (Reporting by Chris Prentice; Editing by Marguerita Choy)