NEW YORK, Feb 15 (Reuters) - U.S. cotton futures recouped
all of its day earlier losses to end Tuesday with strong gains
of more than 2 percent, as some speculators were thought to be
grabbing fiber futures on dips in a market that remains
exceptionally tight on supplies, brokers said.

Benchmark March cotton contracts on ICE Futures U.S.
finished with 3.97-cent gains, a 2.13 percent increase, at
$1.9002 cents a lb.

On Monday, cotton prices slid by almost the same amount as
Tuesday's rise to levels just short of the all-time high. On
Friday, spot fiber futures advanced to an historic record of
$1.9455 per lb.

Call options, that expired on Friday, left some players
holding long call futures. Speculators whose options were in
the money, promptly sold them on Monday, driving futures prices
sharply lower.

But exceptionally tight cotton supplies in the U.S. market,
triggered a buyback on Tuesday, despite the fact that other
U.S. agricultural futures prices, like wheat, corn and
soybeans, tumbled.

'There's no new fundamental news out there, China was up
overnight, but not sharply so. I can understand a little bounce
this morning, but it's been strong all day. The merchandising
trade is lost as to why prices are higher,' said Mike Stevens,
an independent cotton analyst in Mandeville, Louisiana.

He added that trade interests found no plausible reason for
the sharp rise other than ongoing bullish sentiment in cotton.

Overnight, cotton prices firmed in China. The statistics
bureau reported consumer prices rose by 4.9 percent in January,
a smaller increase than the 5.4 percent forecast, which eased
fears of further money tightening that could slow demand.

Bill Raffety, senior analyst for futures brokerage Penson
GHCO in New York, pointed out that U.S. cotton supplies are
dwindling, and a lot of focus has been put low ending stocks.

'The U.S. is the place to go if you need something just in
time. Running quick, you can't get cotton shipped from most
places in the world in terms of placing the order, making the
purchase and having it shipped,' said Raffety.

Though supplies exist elsewhere, transportation, time or
other logistic constraints keep the attention on tight cotton
supplies in the United States.

'There is cotton out there, but people have fallen back on
the reality that there's not much left in the U.S. So, they'll
have to go elsewhere for it and it's tougher to get,' he said.

Brokers also said, some of the price run up may have come
from participants with short futures positions, who needed to
fix prices after buying cotton on call. After cotton's decline
on Monday, they may have rushed in to fix those prices.

Until Friday, prices had never surpassed levels seen during
the U.S. Civil War, estimated by historians around $1.89. The
Civil War lasted from 1861 to 1865.

Analysts said scarce supplies have been driving the rally,
amid healthy demand. Most of the Northern Hemisphere cotton
crop has already been harvested and the pace of cotton export
sales by the United States, seen in USDA's weekly export sales
data, continues to run hot.