NEW YORK, Nov 4 (Reuters) - U.S. cotton futures finished
Friday with moderate gains as investors covered short positions
heading into the weekend amid ideas Greece will reach a deal on
its debt crisis and MF Global customer accounts will be
transferred to add liquidity to cotton trades, brokers said.

'All week cotton ended lower, but today it finished
stronger, because some guys wanted to take their profits going
into the weekend,' said Ron Lawson, managing director of
logicadvisors.com.

The key December cotton contract on ICE Futures U.S.
rose 0.62 cent to end at 98.54 cents per lb, after trading
between 99.82 and 98.05 cents.

Total estimated volume on Friday was 20,721 lots, one-third
higher than the 30-day norm, preliminary Thomson Reuters data
and ICE Futures U.S. data showed.

Last Friday, the December contract ended at $1.0437, the
highest since Sept. 21.

Investors were wary of taking sizable cotton positions or
leaving short positions open going into a weekend, with
survival of Greece's government in doubt ahead of a confidence
vote and uncertainty regarding Europe's debt bailout package.

Also this weekend, transfer of cotton positions amid MF
Global's bankruptcy filing should get sorted out, which could
help cotton prices on Monday, brokers said.

Realistically, Lawson added, 'If we get a peaceful outcome
for the Greek debt crisis, we should have a better platform for
commodities on Monday, along with what could be some resolution
to the MF Global thing. So why not take some profits?'

Meanwhile, he said, the MF Global mess, 'is absolutely
having an effect on day-to-day trading in the cotton market.

There are some players with money that is frozen, their
positions are literally frozen and they cannot operate.'

Commodity brokers rushed on Friday to finish transferring
thousands of customers from bankrupt rival MF Global, shifting
their attention to the delicate task of ensuring new clients'
margins are topped up by next week.

In the background, Chinese cotton buyers continue to keep a
floor under prices. As they replenish their state reserves with
Chinese cotton, they have been buying U.S. cotton imports to
replace those reserves.

U.S. cotton prices, 'can't break down, because the Chinese
are there to buy whatever you bring. They're not a bullish
factor, but they are one hell of a supportive feature,' said
Lawson.

Technically, dealers said the December contract could break
out to the upside of its recent sideways band. The first target
would be $1.0290 per lb, then to a recent high near $1.05.

The downside target is about 97.30, Thursday's low and the
contract's lowest price since Oct. 24.

Open interest in cotton, usually taken as an indicator of
investor exposure in cotton, stood at 165,057 lots as of Nov.
3, its highest level since April, and up from 164,944 lots on
Wednesday, exchange data showed.

Total cotton volume traded Thursday came to 20,721 lots, up
from Wednesday's tally of 20,070 lots, ICE futures U.S. data
reported.