NEW YORK, Feb 3 (Reuters) - U.S. cotton futures closed
sharply lower in volatile trading on Thursday, as profit taking
pulled the market off its latest record high on a day when the
ICE Futures U.S. exchange moved to curb speculation.

Cotton futures closed with the biggest one-day decline
since early December, Thomson Reuters data showed. The market
had surged almost 30 percent since the middle of January to the
highest level in almost 150 years.

The key March cotton contract on ICE Futures U.S.
slid 4.36 cents to close at $1.7186 per lb. The price swung
wildly from $1.8122, up the 5 cent limit, to $1.7122, down the
5 cent limit.

Total volume hit 50,500 lots, the most in 2-1/2 months and
more than 150 percent above the 30-day norm, Thomson Reuters
preliminary data showed.

Analysts said many investors liquidated long market
positions on a day that ICE moved to tighten control of
positions in the spot contract before delivery .

Separately, the CFTC approved an expansion in the daily
trading limits.

'Spec attitudes are they have made a lot of money and the
heightened awareness that both the exchange and CFTC are now
going to be getting involved encouraged some selling,' said
Mike Stevens, an independent analyst from Mandeville,
Louisiana.

The market jumped early on panic buying as tight supplies
forced overseas mills to scramble for cotton, dealers said.

There is also a large on-call position in the market from
cotton buyers who purchased the fiber but now need to fix the
price of their cotton.

'Finally, we did enough (in the rally) to get folks long
enough,' said Sharon Johnson, senior cotton analyst for
brokerage Penson Futures in Atlanta, Georgia.

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, a 5-year high and an increase
of around 15 percent from last year's cotton sowings of 11.04
million acres.

The United States is the biggest fiber exporter in the
world and the anticipated increase in plantings is seen by some
in the trade as not enough to meet robust global cotton
demand.