Dec. 10 (Bloomberg) -- Cotton futures rose to a one-month high after the U.S. government slashed its forecast for inventories to the lowest in at least 14 years.

U.S. stockpiles for the year ending July 31 will total 1.9 million bales, the lowest since the projection in May 1996, when Bloomberg data begins, Department of Agriculture statistics showed today. That was down 14 percent from the November estimate. Cotton prices have surged 81 percent this year, heading for the biggest annual gain since 1973.

“We’ve got a bullish U.S. number because they cut stocks to just incredibly low numbers,” said Sharon Johnson, a senior analyst at Penson Futures in Atlanta.

Cotton futures for March delivery rose 1.02 cents, or 0.8 percent, to settle at $1.3697 a pound at 2:40 p.m. on ICE Futures U.S. in New York. Earlier, the price jumped by the exchange limit of 5 cents to $1.4095, the highest since Nov. 11.

The U.S. crop will be 0.8 percent smaller than last month’s estimate, the government said. Yields in the U.S., the world’s biggest exporter, were lowered to 814 pounds an acre after hail damaged crops in Texas. Last month’s estimate was 821 pounds.

Inventories held in warehouses monitored by ICE have plunged 73 percent this year.

Futures rose 3.5 percent this week, after surging 18 percent last week. The fiber reached a record $1.5195 on Nov. 10 on signs that growers would struggle to meet mounting demand from China, the world’s biggest consumer.

“Overall, demand is still huge,” said Tom Mikulski, a senior market-strategist at Lind-Waldock in Chicago. “The trend is still up.”

A bale weighs 480 pounds, or 218 kilograms.