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NY cotton tumbles as USDA hikes global stock estimate

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* NY cotton ends down 2 pct, sharpest drop since Sept. 21

* USDA hikes global ending stocks for 3rd month

* More downside seen if market closes below 70.65/lb

NEW YORK, Oct 11 (Reuters) - Cotton futures in New York felltheir most in three weeks on Thursday after the U.S. Departmentof Agriculture raised its 2012/13 global ending stocks forecastfor the fiber to a record high for a third consecutive month.

The USDA's latest numbers reinforced concerns aboutweakening demand for cotton from China, the world's largesttextile market. While consumption was thinning, the dataindicated that U.S., Chinese and Indian production of cottonwere all expected to go up.

"It's a bearish roller coaster," said Keith Flury, seniorcommodities analyst at Rabobank.

U.S. cotton's most-actively traded futures contract,December

, settled New York trade at 70.71 cents a lb --down 1.39 cents, or almost 2 percent.

It was the sharpest percentage fall in a day for Decembercotton since Sept. 21. The contract also hit a 10-day bottom of70.41 during the session.

Sharon Johnson, cotton specialist at Knight Futures inAtlanta, Georgia, said additional pressure could bear on themarket if December cotton settled the coming session at below70.65 cents per lb -- the lowest level hit on Sept. 28.

Trading volume during the session were lighter than usual,accounting for just under 53 percent of the 30-day norm,preliminary data from Thomson Reuters showed.

The U.S. government raised its global inventory forecast forthe season to end-July 2013 by 3.4 percent to a record of 79.11million 480-lb bales due to a combination of sharply higherproduction and reduced consumption.

It was its third monthly increase since the new marketingseason started on Aug. 1 and the highest since records began in1960. The new total would also represent a 14-percent jump from2011/12's 69.56 million bales.

The USDA cut its consumption rate for China by 2 millionbales to 36 million, citing falling demand from mills, whichhave bought less due to high domestic prices.

It raised its output forecast for the world's top threeproducers, China, India, the United States, as well as othermajor growers Brazil and Pakistan, taking the total up 2 percentto 116.32 million bales.

(Reporting By Josephine Mason and Barani Krishnan; Editing byBob Burgdorfer)

((barani.krishnan@thomsonreuters.com)(+1 646 223 6192)(ReutersMessaging: barani.krishnan.thomsonreuters@reuters.net))

Keywords: MARKETS COTTON/