Nothing like a bullish report to add fresh fuel to a rebound already well underway before todayΆs report came out. But IΆm doubtful thereΆs enough in these reports alone to punch futures through the overhead resistance likely to be found at the long-term downtrend line crossing in the 91.0 area on this weekly chart:

Prior to release, trade estimates for U.S. production averaged 13.7 million bales, up 200,000 from USDAΆs July estimate and in a range from as low as 13.3 million to as high as 14.2 million. The actual figure came in at 13.05 million bales, down 650,000 bales from the average trade estimate and is thus considered price positive.

As for projected U.S. ending stocks of cotton, prior to release trade estimates averaged 3.1 million bales, up 200,000 from USDAΆs July estimate and in a range from as low as 2.8 million to as high as 3.6 million. The actual revised ending stocks estimate from USDA came in at 2.8 million, down 100,000 bales from last month and the low end of trade expectations and price-friendly. (USDA cut projected starting stocks from the 2012/13 marketing year by 100,000 bales, but also cut anticipated exports for 2013/14 by 400,000 bales.) The new projected range for average farm price of cotton in 2013/14 is 72.0-88.0; narrowing at both ends from the July range of 70.0-90.0.

At the global level for cotton, USDA raised estimated beginning stocks by 770,000 bales, but trimmed estimated global production by 1.64 million bales and increased estimated global usage by 60,000 bales for a net reduction of 570,000 bales in projected ending stocks. And of that reduction in global production, a cut for China accounted for 1 million bales, with Chinese ending stocks lowered by 670,000 bales, to 58.26 million. ThatΆs still 62% of projected global stocks and important because China is holding its stocks in reserve; not for export. To the contrary, China is still expected to import 11 million bales while exporting only 80,000 in 2013/14.