* Beijing confirms changes to import tariff calculation

* Concerns about falling stocks keep market inverted

* Technically, market close to overbought - RSI

NEW YORK, Dec 16 (Reuters) - ICE cotton continued its winning streak into a fifth day on Monday, rising to a two-month high, as concerns about depleting stocks and continued optimism over China's appetite for fiber after the government announced a new formula for import tariffs.

The most-active March cotton contract on ICE Futures U.S. closed up 0.16 cent, or 0.2 percent, at 83.38 cents per lb. Volumes were low, with just over 8,500 lots traded on the day.

A perception of nearby tightness kept the front-month price at a premium over the forward price at 73 cents. The May contract pierced its 100-day moving average to settle at 82.65 cents per lb, up 0.38 cent, or 0.5 percent.

Investors have bet on steady demand from China, the world's largest producer and consumer of fiber.

Confirmation from the Chinese government that it has adjusted the formula for calculating import tariffs fueled hopes that Beijing will not curb quotas for mills to buy foreign fiber.

The limited availability of good quality fiber in the country's state reserve continues to strain textile mills by limiting the volume of quality yarns they can produce and forcing mills to import more yarn, said Mississippi State University Agricultural Economist O.A. Cleveland.

That demand has bolstered prices in the past week.

"This quality problem will linger and keep a floor under prices," said Cleveland in a research note.

Even so, a measurable proportion of the current rally has been associated with short covering by funds and not with any increase in open interest, which suggests that the 84-85 cent for March is "top heavy," he said.

Data on Friday showed speculative investors switched to a net long in cotton futures and options after holding a small net short for a brief four weeks.

Technically, the market was close to overbought territory, with a reading of 69 on the relative strength index, the highest since mid-August.

Another close above 83 cents could set the stage for prices to test August highs around 93 cents, technicians said. (Reporting by Josephine Mason. Editing by Andre Grenon)