Cotton recovers from near 2-month low on higher grains, oil

Jan 13 (Reuters) - ICE cotton futures rebounded from near two-month lows on Monday, as upbeat sentiment in the Chicago grains market and crude oil prices seeped into the natural fiber.

* Cotton contracts for March CTc1 rose 0.06 cent, or 0.09%, at 67.05 cents per lb at 10:45 a.m. ET (1545 GMT). The contract hit its lowest level since Nov. 20, 2024, earlier in the session.

* "To some degree the fact that oil and the Chicago grains are strong, that may be helping some speculators to buy cotton today... but the overall trend is definitely down," said Keith Brown, principal at cotton broker Keith Brown and Co in Georgia.

* Chicago corn and soybean futures remained around multi-month highs after the U.S. Department of Agriculture (USDA) cut its estimates of U.S. crops, indicating tighter supplies than previously thought. GRA/

* Oil extended gains for a third session on Monday, with Brent crude rising above $80 a barrel to its highest in more than four months, driven by wider U.S. sanctions on Russian oil and the expected effects on exports to top buyers India and China. O/R

* Higher oil prices make cotton-substitute polyester more expensive.

* The crop ownership is shifting from farmers, who are emotionally attached and reluctant to sell at low prices, to merchants, who are indifferent and willing to trade, and this transition could potentially increase cotton prices in the future, Brown added.

* In its January World Agriculture Supply and Demand Estimates (WASDE) report on Friday, the USDA raised U.S. cotton production to nearly 14.4 million bales, with ending stocks at 4.8 million bales.

* The report also raised global cotton production to 119.45 million bales, with global ending stocks at 77.91 million bales.

(Reporting by Anmol Choubey in Bengaluru; Editing by Vijay Kishore)

((anmol.choubey@thomsonreuters.com;))