A LARGE domestic supply of cotton in China is still weighing on the Australian cotton market, but there were signs of better pricing yesterday.

Cargill Australia cotton agent David Dugan from Joe Jones and Associates (JJA) Delta, Trangie, said the cotton market was on the mend with WednesdayΆs market hitting a peak.

“(The market) has hit a top of $445 (a bale) as of Wednesday and might go up further.”

The cotton market recorded a gain of 96 points on Tuesday night, pushing the July contract up to settle at US87.39 cents a pound.

Although it was difficult to pin-point a reason for the shift, Mr Dugan said it was down to world forces.

“But the low prices are counteracted by some impressive yields – the Macquarie region is leading in yields so far.”

Mr Dugan said yield was as high as 17 bales a hectare, pushed up by the development of new picking technology.

Queensland Cotton marketing services officer Lucy Watson said meanwhile the Chinese government reached a peak storage of 10.3 million tonnes, roughly 50 million bales, in February.

“The Chinese have accumulated these bales during the past two years and, in mid-January, started auctioning them,” said Ms Watson who services the Macquarie and southern NSW region from the companyΆs Warren office.

“Because of this, they arenΆt buying as much from Australia.”

For every three bales bought domestically she said the Chinese government was allowing purchasers to buy one from an international market.

“Since they have started doing this their stocks are down to about 9.7 million (tonnes).”

Despite lower demand from the industryΆs key market, Ms Watson said the prices were steady at about $435 to $440 a bale.

A high intake of top-grade cotton had attracted a slight premium for some growers who received up to $10 extra a bale for GM 11-1 graded cotton.

On the other hand, some growers had experienced discounts as much as $30/bale due to high micronaire levels in the G5C and G6 groups, due to insufficient water during December and JanuaryΆs heatwave.

Cotton Seed Distributors extension and development agronomist Robert Eveleigh, Wee Waa, said the colour was “fantastic” in the Namoi Valley, but micronaire troubles had discounted the majority of the product.

“As for insects and diseases it has been pretty quiet – quite a few growers havenΆt used any pesticides or only applied one or two sprays.”

While irrigated plantings in the region were much the same as the 2011-12 season, he said the dryland plantings had been significantly smaller.

There were 45,000 hectares in 2011-12 but just 4000ha this season.