NEW YORK, Aug 15 (Reuters) - Cotton futures closed higher
Monday on follow-through speculative buying but trade sales in
the options ring took the steam out of the market and knocked
it back in late trade, analysts said.

The key December cotton contract on ICE Futures U.S.
rose 3.52 cents or by 3.5 percent to finish at $1.0404 per lb,
trading from $1.0052 to the daily limit of $1.0552.

Total volume traded hit over 12,700 lots, about 8.5 percent
under the 30-day norm, Reuters data said.

'It appears to be technical, follow-through buying from
last week,' said independent Louisiana-based analyst Mike
Stevens.

A leading impetus for the advance in cotton futures came
from stronger outside markets and the weaker dollar, he added.
Global shares climbed for the third day running as hopes of
progress in Europe's debt crisis prompted investors to buy up
assets cheapened by last week's rout.

Once trade sales capped the advance, the market sputtered
and the key December cotton contract retreated from the daily
limit high it posted during the session, dealers said.

The level of investor interest barely rose. Open interest
in the cotton market was at 141,178 lots as of Aug. 12, from
140,442 lots as of Aug. 11 which is the lowest level in over
two weeks, ICE Futures U.S. data showed.

Analysts said the market will now turn its attention to the
U.S. Agriculture Department's weekly crop progress report due
out later on Monday to gauge the condition of the crop,
especially in the drought-hit state of Texas.

Total volume traded Friday hit 11,137 lots, the lowest
level of business since July 28, ICE Futures U.S. data showed.