NEW YORK, Feb 1 (Reuters) - U.S. cotton futures settled
higher on Tuesday for the second day running on speculative
buying inspired in part by stronger Chinese prices, with no
sign speculative bulls are done rallying fiber contracts.

Cotton futures had risen over 22 percent in a fresh rally
that began in the middle of January, with Chinese cotton
futures matching the rally in the U.S. market.

(Graph of U.S. and Chinese cotton prices:

http://graphics.thomsonreuters.com/gfx1/RP_20110102144547.jpg)

The rally has made cotton the early leader of commodities
in the Reuters-Jefferies commodity index in 2011, as it rose
almost 20 percent year to date. In 2010, cotton was the best
performing commodity as it went up over 90 percent.

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

The key March cotton contract on ICE Futures U.S.
rose 3.78 cents or 2.2 percent to settle at $1.7222 per lb,
dealing from $1.6923 to daily limit up at $1.7244.

Total volume stood around 26,800 lots, about 40 percent
above the 30-day average, Thomson Reuters preliminary data
showed.

'It's a one-way street for the specs,' said Mike Stevens,
an independent cotton analyst in Mandeville, Louisiana.

The speculative accounts are driving fiber contracts higher
in part because some mills are short on supplies and they would
need to cover those shorts in old-crop contracts in a few
weeks' time, analysts said.

Some traders said gains in Chinese cotton futures gave the
market an early boost. The key September cotton futures
on the Zhengzhou Commodity Exchange hit a new lifetime peak at
33,790 yuan per tonne and was last done at 33,725 yuan, up
1,080 yuan on the day.

The market's rise may also be in anticipation of some
disappointment at U.S. 2011 cotton plantings.

Industry group the National Cotton Council of America will
release its annual plantings survey for cotton at its annual
meeting in San Antonio, Texas on Friday.

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 U.S. is the biggest cotton exporter in the world and
such a rise in plantings is seen by some in the trade as not
enough to sate global cotton demand.

On top of the U.S. cotton sowings increase, China's cotton
planting area will likely rise 9.8 percent in 2011 from the
same period last year, the China Cotton Association forecast.