NY cotton rises on short covering; boosted by buoyant grains

* World Bank warns on slowing Chinese economic growth

* Rain in west Texas may damage some crops

* Specs switch to net short - CFTC data

NEW YORK, Oct 8 (Reuters) - Cotton prices were flat toslightly higher on Monday as speculative short covering and abuoyant grains market offset concerns about slowing growth inChina, the world's largest textile market.

New York cotton for December delivery

settled up 0.41percent at 71.78 cents per lb on ICE Futures U.S., moving offintraday highs after briefly piercing the 72-cent mark.

Fibers may be prone to more short covering after speculativeinvestors raised their bearish bets ahead of the U.S. harvest.

In the week to Oct. 2, they switched to a net short positionfor the first time in two months, Friday's data showed.

Oil led the broader commodities market lower amid concernsthat slower economic growth in China and the debt crisis inEurope will curb demand.

Fears were raised after the World Bank cut its economicgrowth forecasts for East Asia and the Pacific region and saidthere was a risk the slowdown in China could be deeper and moreprolonged than expected by many analysts.

The Thomson Reuters-Jefferies CRB index

, a globalbenchmark for commodities, was down 0.5 percent. The euro wasalso under pressure due to uncertainty over the timing of apossible bailout of Spain.

In cotton, the market was awaiting the U.S. Department ofAgriculture's monthly report due on Thursday for any signs ofdamage to new crops in west Texas, the major U.S. growingregion, after recent wet weather.

Rains can damage quality and quantity of crops because mostbolls, which are the protective capsule surrounding the fiber,are open this far into the season.

It may be too early for the USDA to adjust its outputforecasts yet though and any cuts due to wet weather areunlikely to dent the global record inventory of over 76 millionbales in the current season to end-July 2013 either.

INTL FCStone chief economist, fibers and textiles, GaryRaines said he expects the government to keep its forecast forU.S. output unchanged at 17.1 million bales, waiting untilNovember to pare back its estimate due to the heavy rains.

"While unwelcome showers drenched open bolls across WestTexas and parts of the Mid-South over the last week and a half,cotton in other parts of the region along with much of theSoutheast are doing well," he said.

In particular, South Carolina, Georgia, and Virginia arelikely to produce the biggest harvests in years, while yields inGeorgia's crop may rise to a record, well in excess of 920 lbper acre, he said.

U.S. mill consumption forecasts will be flat from Septemberat 3.4 million bales, he said, although he has cut his U.S.export forecast by 200,000 bales to 11.6 million due to lowerconsumption from China, where the government is expected torestrict imports over the next three months.

"China's recent decision to suspend cotton imports for theremainder of 2012 effectively squelches demand from America'slargest customer of cotton, hinting 2012/13 US exports couldfinish the marketing year perhaps much lower than this target,"he said.

(Reporting by Josephine Mason; editing by Gunna Dickson)