* Market closes off day's lows
* Tight supplies keep cotton well supported
* Cotton open interest at loftiest in almost 2 months

NEW YORK, April 2 (Reuters) - Cotton futures closed lower on
Monday on speculative sales, but tight supplies kept the market
supported and enabled fiber contracts to pare losses, analysts
said.
The market extended losses stemming from a bearish plantings
report last Friday from the U.S. Agriculture Department
forecasting U.S. 2012 cotton sowings at 13.155 million acres,
higher than a Thomson Reuters survey range of 12.74 million to
12.76 million acres.
The benchmark May contract on ICE Futures U.S. shed
0.40 cent to finish at 93.12 cents per lb, moving from 92.05 to
93.70 cents.
New-crop December declined 0.25 cent to end at 90.75
cents, having bounced back from a session low of 89.47 cents.
"I think the specs are trying to probe the downside here,"
said Sharon Johnson, senior cotton analyst for commodities
brokerage Penson Futures in Atlanta.
At the session lows, the market got support from investors
and fund accounts.
Cotton was also buoyed in part by the strong performance of
the grains complex, where corn and soybean futures soared.
There was no reaction in the market to news that ICAP had
bought out VIP Commodities.
"There isn't a market impact because this involves a
decision on who you do business with. It isn't a market mover,"
one trader said.
Analysts said that higher grains prices meant farmers in the
U.S. Delta states and the Southeast would be even more likely
to switch to soybeans and corn from cotton during the spring
planting season.
The next USDA acreage report is due to be released on June
30, and this will set the stage for the upcoming 2012/13
marketing year (August/July).
Open interest in the cotton market, an indicator of investor
exposure in the market, rose for the first time in five sessions
to 192,184 lots as of March 30, having declined for four
consecutive days.
The open interest in cotton was at its highest since Feb. 9,
the exchange data showed.