NEW YORK, June 30 (Reuters) - U.S. cotton futures closed
lower on Thursday, hitting their 5-cent downside limit at one
point, after a government plantings estimate suggested the
biggest U.S. cotton crop in five years.

The losses dragged fiber values down to close out the
second quarter of 2011 with a more-than 40 percent loss. It was
the first quarterly loss since the second quarter 2010, brought
upon by end user demand destruction after prices mounted a
historic rally above $2 per lb in the first quarter.

Benchmark December cotton futures on ICE Futures U.S. shed 2.81
cents or 2.3 percent to settle at $1.1859 per
lb, after dealing between $1.1640 and $1.23.

The losses were triggered by an annual planted acreage
report by the U.S. Agriculture Department that pegged U.S. 2011
cotton sowings at 13.725 million acres, the highest since 2006,
when 15.274 million acres were sown to cotton.

The USDA plantings number came in at the higher end of
Reuters poll, with the average analyst estimate at 13.26
million acres.

'Plantings were on the high side at 13.7 (million acres),
with most of it in Texas, but a lot of that is going to be cut
in half,' said Sharon Johnson, senior cotton analyst at
commodities brokerage Penson Futures.

'It's just a knee-jerk reaction ... we know they're going
to have record-high abandonment this year.'

Total market volumes picked up a bit from the sluggish pace
at the beginning of the week, but still remained on the low
side. More than 16,250 lots traded late in New York, about 20
percent below the 30-day norm, Thomson Reuters preliminary data
showed.

On the weather front, more extreme heat is in store for the
U.S. Southwest and Texas through Friday, forecaster Telvent DTN
said in a daily comment.

Open interest in the ICE futures cotton market stood at
137,261 lots as of June 29, up 1,277 lots from the previous
session, ICE Futures U.S. data showed.