NEW YORK (Dow Jones)--Cotton prices consolidated near unchanged Wednesday as
U.S. government supply and demand outlooks added more detail to the prevailing
market anticipation of dwindling supplies and accumulating demand.

May cotton settled down 12 points, or 0.1%, at 80.21 cents a pound. July
futures settled up 3 points, or 0.03% at 80.65.

May futures have drifted 5% lower since March 1, when cotton reached its
highest levels in two years. Growing demand amid tighter-than-expected supplies
invited speculative fund buying into the cotton, are still 17.7% higher than
recent lows on Feb. 5. Textile mills are buying raw cotton hand to mouth to
spin into yarn and textiles as retailers add to inventories in anticipation of
an economic rebound.

Cotton supply and demand forecasts session from the U.S. Department of
Agriculture underscored the bullish sentiment that has driven the market. The
USDA reduced its outlook for U.S. and world cotton ending stocks, primarily by
increasing its estimate for cotton consumption in the 2009-10 marketing year
that runs from August through July.

"The changes were pretty much in line with trade expectations, and the market
seems content to sit here," said Jack Scoville, vice president at Price Futures
Group in Chicago.

The data were supportive, but not dynamic enough to visibly alter the
fundamental outlook, said Keith Brown, principal of Keith Brown & Co. in
Moultrie, Ga.

In the near term, May cotton will consolidate its recent upward move between
support at 78 cents and the 84.60 high, he said.

Analysts said market focus will now shift more noticeably to the USDA's
spring planted acreage intentions. USDA said in a preliminary report that U.S.
producers are likely to plant 10.5 million acres of cotton in 2010 as recent
high prices make the fiber attractive compared with alternative crops such as
soy and corn. The USDA is scheduled to release its 2010 spring plantings report
March 31.

ICE daily cotton stocks increased by 9,182 500-pound bales Tuesday to total
660,237 bales with 54,508 bales awaiting review and 2,024 decertification
orders, according to exchange data.

ICE cotton open interest--the number of active positions left at the end of
the session--increased by 2,220 positions Tuesday to total 186,855, according
to the exchange.

Volume was estimated 17,255 lots. In options, approximately 6,728 calls and
2,668 puts traded, according to exchange data.

Close Change Range
May 80.21 -12 pts 79.42-81.27
Jul 80.65 + 3 pts 79.84-81.46
Dec 75.49 +12 pts 74.75-75.59