NEW YORK, Feb 4 (Reuters) - U.S. cotton futures finished
down the daily limit on Friday on follow-through profit taking
as investors took cash off the table after the market's record
breaking run this week, analysts said.

Cotton futures had rallied almost 30 percent since the
middle of January to trade at its highest level in almost 150
years, but then staged its biggest one-day fall on Thursday in
volatile business, Thomson Reuters data showed. Year-to-date,
cotton is up almost 20 percent.

(Graph: http://link.reuters.com/kew48n)

The key March cotton contract on ICE Futures U.S.
dropped the 4.00 cents limit to end at $1.6786 per lb, with the
session top at $1.7244.

Despite the steep sell-off of the last two sessions, the
market is up 1.9 percent on the week.

Total volume hit some 31,000 lots, almost 60 percent above
the 30-day norm, Thomson Reuters preliminary data showed.

'We inhaled a rally of 40 cents so we had to exhale (in a
correction),' said Ron Lawson, cotton analyst for commodity
firm logicadvisors.com in Sonoma, California.

Some analysts believe the selling was also induced by news
the exchange is tightening control of positions in the spot
contract before delivery.

Mike Stevens, an independent analyst in Louisiana, said the
market also saw further losses from Thursday's key reversal
where a new record high was achieved and then market closed
nearly limit down.

The last time a key reversal happened in the cotton market
was on Nov. 10 and 'technical weakness' from the reversal on
Thursday lingered in the market during Friday's session,
Stevens explained.

Lawson does not believe the rally is done, pointing to the
price of the Cotlook A index, an industry
publication which issues the average price of cash cotton
purchases in the world.

The A Index was being quoted on Friday at $2.0155/lb.
'The cash (price of cotton) is still running above (the)
futures (market),' said Lawson, which for him means there is
further upside in cotton futures.

The market will now turn its attention to industry group
the National Cotton Council of America which will release its
annual plantings survey for cotton at its annual meeting in San
Antonio, Texas on Saturday.

The data is normally handed out late on Friday, but the NCC
said it will instead be released on Saturday around 10:30 a.m.
EST (1530 GMT).

A Reuters survey at the Beltwide Cotton conference this
month had forecast U.S. 2011 cotton plantings from 12.48
million to 12.53 million acres (5.05 million-5.07 million
hectares), a five-year high and an increase of around 15
percent from last year's cotton sowings of 11.04 million acres.