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 to slightly higher on Monday as speculative short covering and a buoyant grains market offset concerns about slowing growth in China, the world's largest textile market.

New York cotton for December delivery

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

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

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

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

Fears were raised after the World Bank cut its economic growth forecasts for East Asia and the Pacific region and said there was a risk the slowdown in China could be deeper and more prolonged than expected by many analysts.

The Thomson Reuters-Jefferies CRB index

, a global benchmark for commodities, was down 0.5 percent. The euro was also under pressure due to uncertainty over the timing of a possible bailout of Spain.

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

Rains can damage quality and quantity of crops because most bolls, 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 output forecasts yet though and any cuts due to wet weather are unlikely to dent the global record inventory of over 76 million bales in the current season to end-July 2013 either.

INTL FCStone chief economist, fibers and textiles, Gary Raines said he expects the government to keep its forecast for U.S. output unchanged at 17.1 million bales, waiting until November to pare back its estimate due to the heavy rains.

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

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

U.S. mill consumption forecasts will be flat from September at 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 lower consumption from China, where the government is expected to restrict imports over the next three months.

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

(Reporting by Josephine Mason; editing by Gunna Dickson)