Cotton rises in range bound trade buoyed by grains

* Cotton buoyed by soybean, wheat recovery

* Stocks below 10,000 bales for 1st time in over a year

NEW YORK, Oct 3 (Reuters) - Cotton prices rose for a third day on Wednesday in range bound trade as early seasonal selling waned and speculative buying emerged driven by a recovery in grains prices.

New York cotton for December delivery

settled up 0.43 percent at 72.16 cents per lb on ICE Futures U.S.

Trading followed a similar pattern of recent days, with producer hedging ahead of the harvest hurting prices early in the session. That pressure eased by midday as grain markets made a tentative rebound.

"It tried to dip and come back. Today it got some help from the grain markets," said Andy Ryan, risk management consultant at INTL FCStone.

Soybeans and wheat prices jumped on technical buying. Soybeans recovered from recent pressure caused by forecasts of higher-than-expected yields.

Certified cotton stocks fell by 1,672 to 9,070 480-lb bales, their lowest level in more than a year, although traders expect exchange inventory to start climbing again by early November as the new crop starts to hit the market.

Open interest dropped slightly - down 230 lots to 189,437 - as speculators covered some of their bearish positions, although the pace of covering was limited given the market's weak fundamentals, traders said.

Fibers have started the quarter on a positive note in stark contrast to the broader commodities market. The Thomson Reuters-Jefferies CRB index

, a global benchmark for commodities, fell 1.57 percent on Wednesday led by tumbling oil prices amid fresh concerns about a recession in Europe.

(Reporting by Josephine Mason; Editing by Bob Burgdorfer)