NEW YORK, April 6 (Reuters) - U.S. cotton futures finished
up the daily maximum on Tuesday on investor and speculator
short-covering as players awaited release of a government crop
report at the end of the week, brokers said.

The key May cotton contract on ICE Futures U.S. rose
the 7-cent limit to end at $2.0806 per lb, with the session low
at $1.9934.

The new-crop December cotton contract gained 4.21
cents to end at $1.4197.

Total volume traded in the cotton market was around 30,000
lots, about 30 percent above the 30-day norm, Thomson Reuters
preliminary data showed.

Open interest was 195,689 lots as of April 5, the highest
in 8-1/2 weeks, according to ICE Futures U.S. figures.

'I suspect some of Tuesday's and today's rally is due to
spec short covering,' said Sharon Johnson, senior cotton
analyst at Penson Futures in Atlanta, Georgia.

She said that changes in the open interest 'should answer
the question if this is more new longs or just short covering
or some of both accounting for the limit bid' in the spot May
contract.

Mike Stevens, an independent analyst in Louisiana, said the
reversal 'off the $1.87 area (on Tuesday) off trade/mill
support turned the speculative sentiment in a flash.'

He added: 'Sometimes markets are 90 percent sentiment and
10 percent fundamentals.'

Cotton market players are also getting ready for the
release on Friday of the U.S. Agriculture Department's monthly
supply/demand report. Traders said the market will pay
attention to any adjustments in consumption and stock levels.

The first estimates for the 2011/12 cotton season will be
released by the USDA in its May production report.

The market has already digested the USDA's estimate of U.S.
cotton sowings and players are keeping an eye on the very dry
conditions in the top growing area of Texas, which is expected
to plant about half of the U.S. cotton crop.