May closed at lowest finish since March 27. Spotlight expected to focus on demand in U.S. numbers on Wednesday.

Cotton futures extended a losing streak to four in a row amid technically oriented selling in another day of heavy dealings Tuesday prior to the USDA supply-demand report.

The May contract settled down 74 points to 84.64 cents, in the lower quarter of its 148-point range from up 48 points at 85.86 cents to down 100 points at 84.64 cents. This was its lowest finish since March 27.

July closed off 65 points to 86.61 cents, trading from 87.70-86.34, and December settled off two ticks at 85.79 cents, trading 86.46-85.47.

Talk circulated of revived export inquiries and fresh business having been done on the price retreat.

Volume totaled an estimated 51,000 lots, against 52,347 lots the previous session when spreads totaled 30,301 lots or 58%, EFP 342 lots and EFS 8 lots. Options volume totaled 8,450 calls and 8,838 puts.

With the U.S. crop estimate widely expected to rise by about 276,000 bales from a month ago in WednesdayΆs supply-demand report, based on the end-of-season ginning data, attention in the domestic numbers likely will focus on demand.

Total U.S. demand prospects rose slightly in March to an estimated 16.2 million bales, up nearly 8% from last season. The USDA expected domestic mill use to rise 100,000 bales from 2011-12 to 3.4 million and exports to climb a million bales to nearly 12.8 million.

Exports thus were forecast up about 9% this season, with increased supplies helping to boost shipments. The recent pace of sales and shipments along with competitive prices would seem to support another hike in the export forecast.

Although USDA forecast foreign import demand down 6.5% from a year ago to 41.9 million bales, the projection remained the third highest on record, supported largely by continued raw cotton import demand by China.

The USDAΆs projection of the U.S. share of world trade at 30.4% rose from 25.5% last season, and yet that still would be one of the lowest in over a decade.

In March, USDA estimated the total supply — the crop plus beginning stocks — at approximately 20.4 million bales, up 12% from last season when drought dramatically slashed production.

Ending stocks were forecast to increase for the second year in a row to 4.2 million bales, up 25% from 2011-12 and the largest in four seasons.

A survey of cotton analysts by Dow Jones Newswires produced average estimates of 17.1 million bales for U.S. production, 12.9 million bales for exports and 4.1 million bales for ending stocks.

Survey estimates ranged from 17 million to 17.3 million bales for the crop, 12.8 million to 13 million bales for exports and 3.9 million to 4.3 million bales for ending stocks.

Futures open interest fell 4,985 lots Monday to 204,121, with MayΆs down 12,328 lots to 75,966, JulyΆs up 5,947 lots to 80,298 and DecemberΆs up 1,379 lots to 45,617. This marked the first time that MayΆs OI dropped below that in July.

Certificated stocks grew 6,784 bales to 427,813. There were 47,261 bales awaiting review. First notice day for May deliveries now is 10 trading sessions ahead.

World values as measured by the Cotlook A Index fell 135 points Tuesday morning to 92.15 cents. The index premium to MondayΆs May futures settlement widened six points to 6.77 cents.