NEW YORK, Nov 18 (Reuters) - Cotton futures fell by their
daily limit on Friday, as investors fretted over Europe's debt
crisis and players exited long positions in the December
contract before first notice day next week, brokers said.

'A lot of it's Europe, which had a lot of pressure on a lot
of commodities today, cotton more so,' said Sharon Johnson,
senior cotton analyst at Penson Futures.

The spot December cotton contract on ICE Futures
U.S. slid by its daily limit for the second day in a row,
declining 4.69 cents, or 4.71 percent, to end at 94.90 cents
per lb.

Its range spanned 94.77 cents -- the lowest since Aug. 9 --
to $1.0015.

Now-most-active March cotton futures dropped 3.21
cents to close at 93.14 cents, a 3.33 percent decline, after
trading between 93.12 and 97.74 cents per lb.

Total volume traded on Friday rose to 25,263 lots, about 18
percent greater than the 30-day norm, according to preliminary
Thomson Reuters data.

Worries about the impact of Europe's debt problems on
demand, not only in the euro zone, but also spillover effects
in the rest of the world pressured many commodities on Friday.

Euro zone officials said there had been discussions on
having the European Central Bank and the International Monetary
Fund bail out even the bigger economies in the region, but
sentiment remained bearish.

Investors who could not get out of December cotton futures
also scrambled to exit long positions on Friday.

Open interest on December cotton futures came to 9,445
lots, ahead of the contract going into first notice day next
Wednesday.

'I think the longs who have stayed in and didn't get out
yesterday were running for cover. Whatever it takes, get me
out,' Johnson said.

A shaky demand outlook could be seen in news that industry
publication Cotlook cut its forecast of world 2011/12 cotton
consumption and raised its estimate of world 2011/12 cotton
ending stocks.

Open interest in cotton, usually taken as an indicator of
investor exposure, came to 139,409 lots as of Nov. 17, down
from the prior tally of 140,095 lots, exchange data showed.