NEW YORK, Oct 13 (Reuters) - Cotton futures settled firmer
Thursday amid talk China may be buying to rebuild stocks as the
market shrugged off a bearish government crop report, weak
charts and lower financial markets, analysts said.

The key December cotton contract on ICE Futures U.S.
rose 1.05 cents to end at $1.0156 per lb, trading from $1.0011
to $1.0248. The market has ranged from about 98 cents to $1.04
in the last 15 sessions.

Volume on Thursday was in excess of 11,500 lots, more than
10 percent under the 30-day norm, preliminary Thomson Reuters
data showed.

Keith Brown, president of commodity firm Keith Brown and Co
in Moutrie, Georgia, said cotton put in an 'impressive'
performance despite a retreat in financial markets caused by a
narrowing of China's trade surplus.

'Cotton's holding remarkably well,' added independent
analyst Mike Stevens in Mandeville, Louisiana.

He said the failure of the December contract to finish over
$1.04 the past few sessions would have normally meant a retreat
below $1 and a probe of the recent low of 98 cents.

On Wednesday, more pressure came from the U.S. Agriculture
Department's monthly supply report which increased world
2011/12 cotton ending stocks to 54.83 million (480-lb) bales
from 51.91 million last month. USDA also raised world cotton
production to 124.19 million bales from 122.96 million, and
reduced world consumption to 114.38 million from 115.22 million
bales.

All of that, say Brown and Stevens, should pushed cotton
lower. Instead, it went higher.

Analysts said the main suspect is Chinese buying to rebuild
the Asian government's cotton stocks, which have been run down
to stabilize internal cotton prices after the fiber historic
rally last year.

'The main suspect in cotton holding up is China,' a dealer
said. With China buying, traders said mills from other
countries may have jumped in as well and supported the market
at the psychological $1 level.

Open interest in cotton, usually taken as an indicator of
investor exposure in cotton, stood at 153,707 lots as of Oct
12, from 153,794 lots on Oct 11, the exchange said.

Volume traded on Wednesday in the cotton market reached
18,352 lots, against the prior tally of 12,216 lots, ICE
futures U.S. data showed.