* Overseas mill buying stokes rally to record top

 * Cotton futures up almost 25 pct since mid-January

 * Markets eyes NCC poll on U.S. 2011 cotton sowings

 By Rene Pastor

 NEW YORK, Feb 2 (Reuters) - U.S. cotton futures jumped for
the third straight day on Wednesday, settling up the daily
limit, as Asian mills fueled the rally on average volume.

 Cotton futures have rallied almost 25 percent since the
middle of January, the latest wave of a historic run that began
in 2010 and sent cotton prices to their loftiest levels in
almost 150 years.

 "It's basically mills panicking," said Lou Barbera, a
cotton analyst for brokerage VIP Commodities. "Overseas mills
are getting the ball rolling."

 Cotton is the biggest gainer of commodities on the
Reuters-Jefferies commodity index in 2011, matching a feat it
achieved in 2010 when it gained 90 percent for the year.
(Graph: link.reuters.com/kew48n)

 The key March cotton contract CTH1 on ICE Futures U.S.
rose the 4 cent limit to conclude at $1.7622 per lb, with the
session low at $1.73.

 Total volume stood around 20,400 lots, just above the
30-day norm, Thomson Reuters preliminary data showed.

 Powerful cyclone Yasi in Australia also worried the market
because it would hit prime cotton-growing areas. Losses there
could further crimp supplies in Asian markets, dealers said.

 Sharon Johnson, senior cotton analyst at brokerage Penson
Futures in Atlanta, said it is "possible there's a squeeze" in
the U.S. cotton market.

 But Johnson said a new exchange rule could alleviate
concerns that a squeeze is underway. She explained that ICE
Futures U.S. may soon require investors to tell the exchange
how they plan to hedge certain long and short positions in
excess of 300 lots of the spot contract.

 On Thursday, the market will look at the U.S. Agriculture
Department's weekly export sales report to gauge demand for
U.S. cotton.

 The market will then 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 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. [ID:nN06128213]

 The United States is the biggest fiber exporter in the
world and such a rise in plantings is seen by some in the trade
as not enough to satisfy global cotton demand.