* Strong U.S. spending consumer spending helps market
* Pre-Labor Day short-covering also supports

NEW YORK, Aug 30 (Reuters) - Cotton futures in New York rose
for a second straight day on Thursday, bucking the weak trend in
other major commodities, after strong U.S. consumer spending
data in July indicated more demand ahead for the industrial
commodity.
Short-covering prior to the longer weekend, extended by
Monday's Labor Day holiday, also provided support, traders said.
"Cotton was ... moving in defiance against lower oil and
stock prices, as the U.S. consumer spending data and the Labor
Day holiday set a bullish tone for the market," said Sharon
Johnson, cotton specialist for Knight Futures in Atlanta,
Georgia.
U.S. economic data showed consumer spending enjoyed its
biggest rise in five months while the number of Americans filing
new claims for jobless benefits held steady last week.

The benchmark December cotton contract on ICE Futures
U.S. settled up 0.29 cents, or 0.4 percent, at 76.94 cents per
lb. The contract is 2 percent higher on the week, and is poised
to finish August up more than 7 percent for its biggest monthly
gain since February 2011.
U.S. crude oil fell nearly 1 percent on the day while the
Thomson Reuters-Jefferies CRB index, which groups 19
commodities, shed nearly a quarter percent.
This week alone, December cotton rose more than 1 percent on
two sessions -- Monday and Thursday -- on worries about the
potential harm Hurricane Isaac could cause to crops in the key
U.S. cotton growing states of Alabama and Mississippi.
Isaac, downgraded to a tropical storm on Thursday after its
landfall on Tuesday, has not been reported to have inflicted any
major damage on cotton crops as yet, although farmers in
Arkansas were harvesting their rice crop at breakneck speed to
limit damage from the storm.
Fundamentally, the U.S. cotton market is well supplied, with
total output expected to grow 14 percent to over 17 million
bales in the marketing year to July 2012.
Traders say the global surplus in the textile market is also
expected to hit record levels.
While the supply situation is comfortable, investors have
struggled with conflicting market signals of late.
Some see potential for supply scares if weak monsoon rains
curb output in key cotton grower India, forcing the government
to restrict exports.
Hedge funds and other speculative investors doubled the size
of their net long position in U.S. cotton to 12,333 lots in the
week to Aug. 21, data from the Commodity Futures Trade
Commission showed.
That is the most bullish position for hedge funds in cotton
since February, and a dramatic turnaround from a net short just
three weeks ago that contrasts with the weak supply-and-demand
fundamentals.