May 15 (Reuters) - ICE cotton futures rose to the highest level in nearly three years on Monday on short covering amid tight supplies of the natural fiber in the United States.

The benchmark cotton contract on ICE Futures U.S. traded limit up and settled 3.82 percent higher at 85.32 cents per lb.

The contract touched 87.18 cents a lb, the highest since June 2014, earlier in the session.

"Anyone who had to liquidate their short positions because they were unfixed on Friday were left over today, and that kept moving prices up for most of the day," said Gabriel Crivorot, analyst at Societe Generale in New York.

ICE cotton futures surged to trade limit-up on Friday, prompting the exchange to expand the trading limit to 5 cents per pound effective on Monday. On Monday, ICE Futures U.S. said it was reverting to the 4 cents per pound daily trading limit for cotton, effective with the start of trading on Tuesday.

"The main reason for the price rise is likely to be the U.S. cotton exports, which continue to be higher than expected and look set to drive the U.S. stocks-to-use ratio to a three-year low of 18 percent by season's end," Commerzbank analysts said in a note.

* Total futures market volume rose by 48,219 to 102,893 lots. Data showed total open interest gained 2,589 to 255,100 contracts in the previous session.
* Speculators cut their net long position in cotton in the week to May 9 by 2,595 contracts, to 96,210, U.S. Commodity Futures Trading Commission data showed on Friday.

(Reporting by Arpan Varghese in Bengaluru; editing by Diane Craft)