NEW YORK, June 2 (Reuters) - U.S. cotton futures finished
at a month high Thursday on investor buying sparked by the
worst drought in a century in the key growing state of Texas,
analysts said.

The National Drought Monitor said in a report that more
than half of Texas, the biggest cotton producing state in the
U.S., is experiencing 'exceptional' drought.

on ICE Futures U.S. went up 1.96 cents to finish at $1.3923 per lb, dealing
from $1.3381 to $1.395. It was the highest settlement for the
third position cotton contract since May 3.

Spot July cotton climbed 3.27 cents to conclude at
$1.6424 per lb.

Total volume traded Thursday reached over 32,100 lots,
almost double the 30-day norm, Thomson Reuters preliminary data
showed. Volume traded in the cotton market during Wednesday's
rally stood at 28,770 lots, ICE Futures U.S. data showed.

Open interest in the cotton market was at 158,298 lots as
of June 1, its highest level since April 20, the exchange data
showed, and a seeming indication of renewed investor interest
in the cotton market.

The December contract has traded over the 200-day moving
average at $1.3137 over the last two sessions and is taking aim
at the 100-day MA at $1.5206, according to Thomson Reuters data
and market dealers.

The July contract jumped as well after Allenberg, one of
the biggest cotton merchants in the world, decertified 142,686
(480-lb) bales of cotton it took delivery of from the May
contract.

That left a total of 52,035 bales left in certificated
cotton stocks. Traders said that meant deliverable cotton
supplies against the spot July contract would be very tight as
a result.