* Chart seen strong as cotton tracks 200-day MA
* Buy stops lift prices over 2 pct to 84.47 cts/lb
* Fiber recovers after Friday's bearish USDA report
NEW YORK, Jan 13 (Reuters) - Cotton futures charged higher on Monday, fueled by strong chart signals and buy stops and recovering after last week's bearish U.S. government supply and demand report.
The benchmark March cotton contract on ICE Futures U.S. closed up 1.09 cents, or 1.3 percent, at 83.68 cents a lb in the spot contract's biggest daily gain in a month.
The contract continued to track along its 200-day moving average of 83.73 cents a lb.
Cotton outperformed broader commodities markets, and was one of the biggest gainers of the 19 components in the benchmark Thomson Reuters/Core Commodity CRB index.
Prices rose throughout the session, with gains spurred by a lack of follow-through selling after a bearish monthly supply and demand forecast from the U.S. Agriculture Department (USDA). Rising grains markets also lent support.
Prices turned down from a rally on Friday after the USDA upped its forecast for global output and record world inventories.
"The initial reaction to the USDA report was a knee-jerk to the build in supplies, but traders are out there now looking from a macro(economic) perspective that major economies are going to grow a little bit better," said Michael Smith of T&K Futures & Options, a Port Saint Lucie, Florida-based brokerage.
Waves of money flowed out of the commodities complex and into rallying financial markets last year.
Buy stops were hit Monday as prices climbed above 83.50 cents a lb, lifting prices as much as 2.3 percent during the day's trade.
A sinking U.S. dollar also fueled gains, boosting buying of dollar-traded commodities as it made them less expensive to holders of other currencies.
Even so, traders noted that prices have been locked in a tight range between about 81 and 85 cents for the past month.
"There's producers still offloading bales above the market and there's buying underneath the market," said Chris Kramedjian, a risk management consultant for INTL FCStone in Nashville, Tennessee. (Reporting by Chris Prentice; Editing by Meredith Mazzilli)
