NEW YORK, July 19 (Reuters) - Cotton futures settled higher
Tuesday on investor short-covering as the market rebounded from
its fall in the previous session to a nine-month low although
players are still fretting over the unresolved debt woes in the
United States and Europe, analysts said.

Fundamentally, the market is still wrestling with demand
destruction after prices hit a record over $2 per lb this
spring.

'It had to be nearly bludgeoned to death (before
rebounding),' said Keith Brown, president of commodity firm
Keith Brown and Co in Moultrie, Georgia. 'I think it's (spec)
short-covering.'

The key December cotton futures on ICE Futures U.S.
gained the 4-cent daily limit to end at $1.0084 per lb, with
the session low at 97 cents.

On Monday, the contract finished at 96.46 cents in the
lowest close for the second-position contract since early
October 2010, Thomson Reuters data showed.

Business was light after two consecutive sessions of heavy
dealings. Total market volume hit around 10,200 lots at 2:42
p.m. EDT (1842 GMT), nearly 50 percent below the 30-day norm,
Thomson Reuters preliminary data showed.

The market's focus was still fixed firmly on the debt
crisis on either side of the Atlantic.

World stocks and the euro climbed Tuesday on upbeat U.S.
corporate earnings as investors looked ahead to an EU summit
later this week on expectations that a solution to Greece's
debt problems may be reached.

Brown and some analysts believe the market's steadiness may
not last, given the poor demand for cotton from millers who
have adequate coverage or have shifted to other fibers to lower
their costs.

In fact, Brown said cotton may be gradually going back to
its historical range between 60 and 90 cents after its strong
rally in the last five months of 2010.