* Biggest monthly percentage decline since July 2011
* Cotton boosted by late month-end short-covering
* Trade eyes shaky global economy

NEW YORK, May 31 (Reuters) - Cotton futures settled firmer
Thursday on month-end short-covering after dropping to a
2-1/4-year low in the previous session, with the trade
continuing to fret over the euro zone crisis and cotton demand
in top consumer China, brokers said.
Spot July cotton on ICE Futures U.S. rose 0.64 cent
to end at 71.55 cents per lb after trading from 70.62 to 71.75
cents. The range fell within Wednesday's 70.38-73.15 cents band.
July had ended on Wednesday at 70.91 cents, the lowest
settlement for the spot contract since early February 2010,
according to Thomson Reuters data.
Basis the spot month, the market ended May down 18 percent,
the biggest monthly percentage loss for cotton since it tumbled
36.1 percent in July 2011, Thomson Reuters data showed.
New-crop December cotton added 0.07 cent on the day
to finish at 70.35 cents, dealing between 69.50 and 70.95 cents.
The range came within Wednesday's 69.42-71.57 cents band.
Sharon Johnson, senior cotton analyst for commodity
brokerage Penson Futures in Atlanta, Georgia, said what is
particularly striking is that December is now the most
active contract.
Open interest in December stood at 89,523 lots as of May 30,
while that for July was 87,890 lots.
Johnson said it would be one of the earliest dates for
December to become the active contract, indicating that
investment funds are quickly getting out of July and into
new-crop December.
The 14-day relative strength index stood near 27, from the
previous 25. A reading of 30 or lower means the market is
oversold and one of 70 or above indicates overbought conditions.
The market is now looking toward the release of weekly
export sales data from the U.S. Agriculture Department later in
the week to see whether there have been any cancellations of
orders by China.
Volume on Thursday reached slightly more than 33,500 lots,
nearly 40 percent over the 30-day norm, Thomson Reuters data
showed. Traded volume on Wednesday stood at 46,054 lots, the
highest since April 18, ICE Futures U.S. data indicated.
Open interest, an indicator of investor interest, amounted
to 193,425 lots as of May 30, the loftiest since April 5, the
ICE data showed.