* Profit-taking, producer sales knock cotton lower

* Analysts say overall trend is for higher values

NEW YORK, Jan 13 (Reuters) - U.S. cotton futures settled sharply lower on Thursday on investor profit-taking and producer sales ahead of a holiday weekend, with analysts saying the overall outlook for the market remained bullish.

The cotton market will be shut on Monday for the U.S. Martin Luther King Jr. Day holiday. Trading reopens on Tuesday.

The key March cotton contract on ICE Futures U.S. fell 3.91 cents to settle at $1.4406 per lb, dealing from $1.4397 to $1.5163.

Trading volume totaled around 25,000 lots, almost 40 percent above the 30-day norm, Thomson Reuters preliminary data showed.

Keith Brown, president of commodity firm Keith Brown and Co in Moutrie, Georgia, said players did not want to take aggressive positions before the holiday, but the market outlook pointed to further gains in cotton futures.

"The slope of the trend is still up," Brown said. "The fundamentals remain bullish."

Traders said cotton should grind higher given tight supplies going forward and steady demand, with the new-crop December contract receiving solid support above $1 per lb.

"Competition from corn and (soy)beans will probably prevent Dec(ember) revisiting the sub-dollar area for a while," said a report by Mike Stevens, an independent cotton analyst in Mandeville, Louisiana.

Higher corn and soybean futures could prompt U.S. farmers to plant more of those crops, reducing the area for cotton and leading to tight supplies -- a development that would support cotton prices, analysts said.

The market drew early support from the U.S. Agriculture Department's weekly export sales report.

The USDA said U.S. cotton sales stood at 357,600 running bales (RBs, 500-lbs each), from 169,100 RBs in last week's report.

The market is now monitoring whether high cotton prices result in demand destruction going into spring, traders said. (Reporting by Rene Pastor; Editing by Dale Hudson)