Benchmark cotton futures on ICE hit a three-month low on Wednesday but recovered to close higher for the first time in four sessions as extensive recent losses prompted investors to cover short positions and enticed physical buying from mills. "The bears lost their nerve as far as pushing it lower," said Keith Brown, principal at Keith Brown and Co in Moultrie, Georgia, adding that the price drop likely stimulated physical demand as well, pushing prices up.

December cotton on ICE Futures US rose by 0.24 cent on Wednesday, a 0.4 percent gain, to 64.48 cents per pound, after falling to as low as 63.94 cents a pound, the lowest level for the second-month since April 23. Total futures market volume rose by 286 to 13,158 lots. Data showed total open interest fell 1,018 to 175,767 contracts in the previous session.

Certificated cotton stocks deliverable as of July 21 totalled 131,513 480-lb bales, down from 133,706 in the previous session. The dollar index was up 0.29 percent. The Thomson Reuters CoreCommodity CRB Index, which tracks 19 commodities, was down 1.23 percent. The Relative Strength Index in the most-active contract rose to 42.335.