* Suspect "micronaire" levels behind rally
* Abrupt price reversal days after bleak USDA report

By Barani Krishnan
NEW YORK, Oct 16 (Reuters) - U.S. cotton jumped nearly 4
percent on Tuesday in its biggest one-day rally in more than two
months as traders chased prices up on worries about the quality
of fiber that the market will be seeing in the near term.
Some traders said they suspected cotton coming off early
harvest in fields in the southeastern United States had high
levels of "micronaire", resulting in coarse fibres that could
break during the spinning process at textile mills.
Such fears led to an abrupt reversal in prices in a market
that just days ago appeared doomed after the U.S. Department of
Agriculture issued one of its bleakest reports on cotton in
decades.
Cotton's most actively traded contract on ICE Futures U.S.,
December, settled at 74.86 cents a pound, gaining 3.5
percent on the day in heavy trading.
Thomson Reuters data showed volumes in ICE cotton at above
54,000 lots by 3:30 pm EDT (1930 GMT), some 220 percent higher
than the 30-day norm.
In terms of gains, it was the largest in a day for cotton
since Aug. 3, and the third consecutive day of market gains.
Cotton also outperformed other commodities in U.S. trading,
topping gains on the Thomson Reuters-Jefferies CRB index
which tracks 19 raw materials markets.

ABRUPT TURNAROUND
Just last Thursday, December cotton fell about 2 percent
after the U.S. Department of Agriculture increased to a record
high its forecast for worldwide stocks of cotton at the close of
the 2012/13 season.
Sharon Johnson, a cotton specialist at Knight Futures in
Atlanta, Georgia, had said then that the USDA estimate was the
agency's most bearish take on cotton since the 1970s.
But Keith Brown, who heads commodities broker Keith Brown
and Co in Moultrie, Georgia, said the market was on a different
spin now.
"I think what the market is experiencing now is a quality
problem, not a quantity problem," Brown said.
"Merchants are concerned about getting the wrong kind of
cotton, the low quality type, so they're buying the market up to
ensure they get the right type of cotton when it comes time for
December delivery."
Brown said the price spike "could be a momentary event"
because of the USDA cotton forecast.
Thursday's USDA report marked the third month in a row that
the agency had increased its estimates for worldwide stocks of
cotton since the new marketing season started on Aug. 1.
The latest revision put ending stocks 14 percent higher than
2011/12's 69.56 million bales.