* Cotton ends down after Monday's run-up on fears of storm
damage
* Tropical Storm Isaac advances into hurricane, heads toward
New Orleans
NEW YORK, Aug 28 (Reuters) - U.S. cotton prices fell on
Tuesday after players took profit on the market's run-up the
previous day on fears of storm damage to crops.
The benchmark December cotton contract on ICE Futures
U.S. slid 0.52 cents, or 0.7 percent, to settle at 75.62 cents
per lb.
The contract jumped 1.2 percent on Monday on worries about
the potential harm Tropical Storm Isaac could cause to cotton
crops as it headed toward Alabama and Mississippi -- two
important states in the U.S. cotton belt.
Isaac strengthened into a hurricane just off the U.S. Gulf
Coast on Tuesday, churning toward landfall in the New Orleans
area seven years after the city was devastated by Hurricane
Katrina.
"Today's cotton market is a classic case of day traders at
work, taking profit after pushing prices up a day earlier," said
Mike Stevens, an independent cotton analyst based in Mandeville,
Louisiana.
Despite the hurricane, there are some concerns about a
shortage to cotton supplies. Texas, the country's main cotton
growing region, will be unscathed by Isaac. Total U.S. cotton
output is expected to grow 14 percent to over 17 million bales
in the marketing year to July 2012.
While the supply situation for cotton is comfortable,
investors have struggled with conflicting signals of late in the
market.
Traders say the global surplus in the textile market is
expected to hit record levels. But some funds see opportunities
if weak monsoon rains curb output in key cotton grower India,
forcing the government to restrict exports.
Hedge funds and other speculative investors doubled the size
of their net long to 12,333 lots in the week to Aug. 21, the
latest Commodity Futures Trade Commission data showed on Friday.
That is the most bullish position for hedge funds in cotton
since February, and a dramatic turnaround from a net short just
three weeks ago that contrasts with the weak supply-and-demand
fundamentals.