May 12 (Reuters) - ICE cotton futures surged to trade limit up on Friday, hitting a near-three year high, supported by demand from pending mill fixations and fund buying amid tightening stocks of the natural fiber.

The benchmark cotton contract on ICE Futures U.S. was up 3 cents, or 3.79 percent, at 82.18 cents per lb, the highest since June 2014.

"Mills with unfixed sales were caught out by tightening U.S. supplies and bullish speculators," said Gabriel Crivorot, analyst at Societe Generale in New York.

"This week, there are reports of tightening stocks in the U.S., as exports have recovered from a few disappointing weeks. Additionally, funds have been increasing their net long position to near record highs again, even as prices had been falling."

Weekly export sales data from the U.S. Department of Agriculture (USDA) on Thursday showed net upland sales for the 2016/17 crop last week totaled 160,600 running bales, up 5 percent from the week before.

"It's just one of these bizarre things where the market is trying to ration a small carry-up," said Rogers Varner, president of Varner Brokerage in Cleveland, Mississippi.

"This is a process the market has to go through in order to get some cancellations." (Reporting by Vijaykumar Vedala and Arpan Varghese in Bengaluru; Editing by Bernadette Baum)