March 21 Cotton futures rose on Monday to their
highest single-session gain in a week as investors covered
bearish bets, stemming losses in the previous session spurred by
news surrounding the release of massive Chinese stockpiles.

Speculators boosted their net short position in cotton by
3,952 lots to 40,488 lots, according to Commodity Futures
Trading Commission data, as prices touched fresh 2009 lows. That
was the largest net short position in fiber since records dating
back to 2006.

"There was some nervousness on part of the shorts to take
some profits and cover those up," said Louis Rose, independent
cotton trader and consultant with Risk Analytics in Memphis,
Tennessee.

China's government may begin selling its bulging state
cotton reserves starting from the middle of April, with a
priority to offer good quality cotton, including imported fiber,
a government official said last week.

However, the markets did not get enough clarity from China
"to decide which direction it (the sale) is going," Rose said.

* The front-month May contract on ICE Futures U.S.
settled up 1.01 cent, or 1.77 percent, at 58.17 cents per lb,
after touching a high of 58.58 cents.

* The dollar index was up 0.29 percent. The Thomson
Reuters CoreCommodity CRB Index, which tracks 19
commodities, was up 0.01 percent.

(Reporting by Arpan Varghese in Bengaluru; Editing by Sandra
Maler)