* Rallies in corn, wheat lift cotton prices
* Tropical Storm Debby adds to gains
* July deliveries underway

NEW YORK, June 25 (Reuters) - Most U.S. cotton contracts
finished with healthy gains on Monday, swept up by the rally in
Chicago grain markets, with more support from Tropical Storm
Debby's heavy rains over Florida, brokers said.
July fell hard in minimal volume as the contract enters
delivery period, but December futures, along with the rest of
the board, posted robust gains, pulled up with corn and other
agricultural futures on the Chicago Board of trade.
"Open interest in July is down to zilch. So, it doesn't
matter what July does at this point," said Sharon Johnson,
senior cotton analyst at Penson Futures in Atlanta.
December cottton on the ICE Futures U.S. exchange was
up 0.93 cent, or 1.35 percent, to settle at 70.05 cents per lb,
after setting a range between 68.50 and 70.33 cents. Volume came
to 9,726 lots.
The spot July cotton contract tumbled 3.71 cents, or
5.00 percent, to end at 70.46 cents per lb. Volume was paltry at
193 contracts.
With Monday as first day of deliveries for July cotton,
daily trading limits on prices were suspended. But, analysts
said there was so little open interest left in July, with now
less than 1,800 outstanding contracts, that the steep percentage
loss in price was inconsequential to the market.
"For anyone in the delivery process it's a question of, 'Do
you want to make delivery or do you want to take delivery?,'"
said Johnson.
"But December is up because of what's going on in Chicago
with huge rallies in corn, beans, and wheat," she added.
Last Thursday, December futures closed at 67.71 cents, its
lowest settlement since June 5 and slipped to a two-week low on
Friday at 67.38 a lb. Monday's gains recouped much of the loss.
The rest of the board finished with robust gains. Total
volume traded on Monday came to 11,051 lots, about 70 percent
below the 30-day norm, Thomson Reuters data showed.
U.S. corn futures surged the daily limit, rallying more than
7 percent to their highest since early February, as hot, dry
weather in the Midwest growing area hurt yield prospects.
"Dry weather in the Midwest is burning up the corn crop and
we're getting into the pollination stage. That's not good for
corn. By extension, cotton participates in a kind of spillover
affect," Johnson added.
The weather impact from Tropical Storm Debby was also
providing some lift to cotton prices as it moves across Florida.
Tropical Storm Debby weakened slightly as it moved slowly
over the northern Gulf of Mexico, dumping heavy rains and
threatening to bring flooding and tornadoes to parts of Florida.

Cotton may have also benefited from Chinese buying after
last week's declines, noted Mike Stevens, cotton analyst in
Mandeville, Louisiana.
"We're right back in the area where the Chinese National
Reserve has shown extreme interest, and it will be no surprise
to see additional new crop purchases."
In China, this week's rains in major corn and cotton
producing provinces will give much needed relief to
drought-stricken fields, although some areas risk being hit by
floods, the country's weather bureau said.
Friday's volume came to 20,642 lots, down 12,988 from 32,988
lots in the previous session, ICE Futures U.S. data showed
Open interest in the cotton market, an indicator of investor
exposure, fell for the seventh consecutive session to a 6-month
low at 166,418 lots, down by 929 lots, as of June 22.