NEW YORK, Nov 21 (Reuters) - Cotton futures ended Monday
down by their daily limit on wholesale investor liquidation as
European debt woes and budget deadlock in the U.S. underscored
fears a global recession would cripple demand for cotton,
analysts said.

Global stocks sank Monday due to worries over
out-of-control debt on both sides of the Atlantic.

The spot December cotton contract on ICE Futures
U.S. dropped 4.00 cents to finish at 90.81 cents per lb, with
the day's top at 95.78 cents.

The now most-active March cotton futures fell 2.86
cents to end at 90.41 cents, moving from 90.16 to 93.71 cents.

Total volume traded Monday hit almost 29,400 lots,
one-third above the 30-day norm, preliminary Thomson Reuters
data showed.

Sharon Johnson, senior cotton analyst for commodity
brokerage Penson Futures in Atlanta, said the downturn in the
market was caused primarily by 'what is going on in Europe and
Washington (DC).'

'All the minuses for cotton are there,' she said, listing
them down as the protracted debt crisis in Europe, the failure
of the U.S. Congress 'super-committee' to reach a compromise
budget deal, and the urgency felt by some investors to get out
of December before it goes into delivery on Wednesday.

Open interest in the contract was at 7.068 lots as of last
Friday. Traders forecast by close of trade on Monday, open
interest in the cotton market will be down to 3,000 to 4,000
lots.

Market participants were eyeing whether consumer demand
will pick up or potential buyers like China, the world's No. 1
consumer of cotton, will hold back and wait for prices to
weaken further before booking orders at the lows, analysts
said.

Last week, the Chinese were big buyers in the U.S.
Agriculture Department's weekly export sales report on
Thursday.

Open interest in cotton, usually taken as an indicator of
investor exposure in the market, stood at 138,160 lots as of
Nov. 18, exchange data showed.

Total volume traded Friday in the cotton market reached
27,495 lots as of Nov. 18, ICE futures U.S. data said.