* NY cotton ends down 2 pct, sharpest drop since Sept. 21
* USDA hikes global ending stocks for 3rd month
* More downside seen if market closes below 70.65/lb

NEW YORK, Oct 11 (Reuters) - Cotton futures in New York fell
their most in three weeks on Thursday after the U.S. Department
of Agriculture raised its 2012/13 global ending stocks forecast
for the fiber to a record high for a third consecutive month.
The USDA's latest numbers reinforced concerns about
weakening demand for cotton from China, the world's largest
textile market. While consumption was thinning, the data
indicated that U.S., Chinese and Indian production of cotton
were all expected to go up.
"It's a bearish roller coaster," said Keith Flury, senior
commodities analyst at Rabobank.
U.S. cotton's most-actively traded futures contract,
December, settled New York trade at 70.71 cents a lb --
down 1.39 cents, or almost 2 percent.
It was the sharpest percentage fall in a day for December
cotton since Sept. 21. The contract also hit a 10-day bottom of
70.41 during the session.
Sharon Johnson, cotton specialist at Knight Futures in
Atlanta, Georgia, said additional pressure could bear on the
market if December cotton settled the coming session at below
70.65 cents per lb -- the lowest level hit on Sept. 28.
Trading volume during the session were lighter than usual,
accounting for just under 53 percent of the 30-day norm,
preliminary data from Thomson Reuters showed.
The U.S. government raised its global inventory forecast for
the season to end-July 2013 by 3.4 percent to a record of 79.11
million 480-lb bales due to a combination of sharply higher
production and reduced consumption.
It was its third monthly increase since the new marketing
season started on Aug. 1 and the highest since records began in
1960. The new total would also represent a 14-percent jump from
2011/12's 69.56 million bales.
The USDA cut its consumption rate for China by 2 million
bales to 36 million, citing falling demand from mills, which
have bought less due to high domestic prices.
It raised its output forecast for the world's top three
producers, China, India, the United States, as well as other
major growers Brazil and Pakistan, taking the total up 2 percent
to 116.32 million bales.