* Weak outside markets weigh on fiber contracts
* Falls in grain complex weigh on cotton

NEW YORK, July 23 (Reuters) - Cotton futures settled lower
on Monday on profit-taking and investor sales as the fiber
declined for the first time in four sessions due to weak
financial and grain markets, brokers said.
Cotton contracts came under pressure from a selloff in world
stocks as the euro tumbled versus the dollar on bailout fears in
Spain, while U.S. corn fell 1 percent from record
highs after forecasts of rain in drought-hit U.S. areas.
The benchmark December cotton contract on ICE Futures
U.S. fell 0.75 cent or 1 percent to end at 72.19 cents per lb,
trading from 71.21 to 72.90 cents.
Volume traded on Monday stood near 11,700 lots, some
two-thirds under the 30-day norm, Thomson Reuters data showed.
"Everything was really getting whacked on the Spanish
situation," said Mike Stevens, an independent cotton analyst
based in Mandeville, Louisiana.
But December managed to hold support near 71 to 71.20 cents,
and pared losses on late buying by small speculators, brokers
said.
In a weekly commentary, Stevens said "there are a number of
fundamental and technical factors that could quickly alter the
price structure by 5 to 10 cents either way very quickly."
"The number one question that overhangs the market is of
course the Chinese Reserve's plans for their enormous stockpile
of cotton," he added.
Open interest, an indicator of investor interest in a
market, stood at 171,718 lots as of July 20, the exchange said.

Volume traded on Friday amounted to 12,732 lots, according
to ICE Futures data.