NEW YORK, June 15 (Reuters) - U.S. cotton futures settled
lower Wednesday on investor liquidation as a commodity-wide
sell-off spilled into the market, analysts said.

Fundamentally, cotton is still looking at one of the worst
droughts in a century damaging cotton crops in Texas, the top
growing state in the country.

The key December cotton contract on ICE Futures U.S.
fell 5.98 cents to finish at $1.258 per lb, ranging from
$1.3224 to down the 6.00 cent daily limit at $1.2578.

The spot July contract dropped 3.58 cents to settle
at $1.5196 per lb.

Total volume traded Tuesday reached nearly 24,000 lots at
3:02 p.m. EDT (1902 GMT), over 70 percent above the 30-day
norm, Thomson Reuters preliminary data showed.

'Everybody's getting pasted' by the sell-off, said Jobe
Moss, an analyst for brokers and merchants MCM Inc in Lubbock,
Texas.

Stocks and the euro tailspinned lower as civic unrest and
indecision among Europe's leaders fed fears that Greece is
edging closer to default.

Traders said that Wednesday's action in the cotton market
had nothing to do with its fundamental outlook.

They pointed to the U.S. Agriculture Department's weekly
crop progress report late on Monday which showed that Texas
reported that 44 percent of its cotton was in poor to very poor
condition. Georgia, the second biggest cotton growing state,
showed 46 percent of its crop in poor to very poor shape.

Some 34 percent, or one-third, of the U.S. cotton crop was
in poor to very poor condition, the USDA said, compared to 4
percent in poor shape at this time last year.

Texas is dealing with one of its worst droughts in a
century and a similar dry spell has hit areas of southern
Georgia.

The weather forecast for Texas calls for more dry and hot
weather through Sunrday, a report by forecaster Telvent DTN
said.