Cotton futures fell from a record on speculation that the global crop will increase, replenishing a deficit that led prices double in the past five months.

Production will exceed demand by 1.2 million metric tons in the season starting Aug. 1, making up for about a third of the shortfall in the past two years, Cotlook Ltd., an industry researcher, said yesterday. Earlier, cotton jumped the most allowed by ICE Futures U.S. to a record $2.0893 a pound and then tumbled by the limit.

Prices may “wane over the balance of 2011 as global production rebounds and inventories begin to rebuild,” Luke Mathews, a strategist at Commonwealth Bank of Australia, said in a report.

Cotton futures for May delivery, the most-active contract measured by open interest, fell by the maximum of 7 cents, or 3.5 percent, to settle at $1.9493 at 2:33 p.m. on ICE in New York.

The price for March delivery dropped 7 cents to settle at $1.9702 after rising to an all-time high of $2.1102.

Futures jumped by the exchange limit in the past two days.

“The market was going crazy because of short-covering by mills,” said Ron Lawson, a managing director at Logic Advisors, a commodity consultant in Sonoma, California. “We will see a temporary pullback, but the demand story remains intact.”

World output will gain 13 percent to a record 27.65 million tons, more than the projected 4.4 percent increase in consumption Birkenhead, England-based Cotlook said yesterday in its first estimates for the new season. In China, the world’s biggest producer and consumer, output will increase 15 percent, the company said.