Rewrites after WASDE report, adds comments, details and updates prices

Aug 12 (Reuters) -ICE cotton futures rose to a near three-week high on Monday after the U.S. Department of Agriculture (USDA) lowered U.S. and global production and ending stock estimates for 2024/25 crop year in its monthly supply-demand report.

* Cotton contracts for December CTZ4 rose 0.65 cents, or 0.95%, at 68.99 cents per lb at 02:25 p.m. EDT (1825 GMT), having hit its highest level since July 23, earlier in the session.

* "We ended up seeing quite a few surprises on this report, both for the old crop and new crop in terms of tightening the balance sheet, which is leading this rally here," said Bailey Thomen, cotton risk management consultant at StoneX Group.

* "Some of the biggest changes that we had were a big drop in the U.S. production... The market is finding a lot of resistance coming in from the technical side. For now, probably the new range that we're looking at is going to be this 70 to 72 cent."

* In its August World Agriculture Supply and Demand Estimates (WASDE) report, the USDA lowered U.S. production estimates by 1.9 million bales to 15.1 million bales, while U.S. ending stocks estimates were cut by 800,000 to 4.5 million bales.

* The agency also lowered its global output estimate by 2.6 million bales to 117.6 million bales, bringing the ending stocks forecast to 77.6 million bales from 82.6 million bales last month.

* "Global consumption is reduced by almost 1 million bales, mainly due to reduced consumption in China with largely offsetting changes elsewhere," the USDA said.

* Also helping cotton, Oil prices were up by more than $1 a barrel. Higher oil prices make cotton-substitute polyester more expensive O/R

* Meanwhile, cotton speculators increased their net short position by 2,526 contracts to 54,942 in the week of Aug. 6. CFTC/

Reporting by Anmol Choubey and Brijesh Patel in Bengaluru; Editing by Vijay Kishore and Tasim Zahid