NEW YORK, Jan 18 (Reuters) - Cotton futures settled lower on Wednesday due to modest profit-taking following the previous session's two-month high, and the market could consolidate here for now, analysts said.

Benchmark March cotton futures fell 0.66 cent to end at 97.53 cents per lb, moving from 95.80 to 98.16 cents. Trade remained within the previous session's range of 95.67 to 99.47 cents.

On Tuesday, March cotton finished at 98.19 cents in the highest settlement for the spot contract since mid-November, Thomson Reuters data showed.

Volume on Wednesday jumped to almost 20,000 lots, more than 40 percent above the 30-day norm, according to preliminary Thomson Reuters data.

'Today is a risk-off day. (Cotton's) overbought,' said Mike Stevens, an independent cotton analyst in Mandeville, Louisiana. 'We've been soft all day ... despite a weaker dollar.'

Analysts said cotton was due for a pullback after finishing at its highest level in two months.

A close below the Tuesday low of 95.67 cents would increase the odds of a correction, Stevens said.

Such a move could bring prices slipping to 94 and then 91 cents, analysts said.

Supportive for cotton was news on Tuesday that China's planting area for the fiber in 2012 is expected to fall 10.5 percent due to reduced profits.

Total volume traded on Tuesday reached 32,156 lots, from the prior count of 18,503 lots, ICE Futures U.S. data showed.

Open interest - an indicator of investor exposure - in the cotton market stood at 155,162 lots as of Jan. 17, from 154,319 lots on Jan. 13, the exchange said.