Changes in ChinaΆs reserve auctions overshadowed positive U.S. weekly export sales and shipments. Commitments reached 95% of USDAΆs 2012-13 export forecast and shipments 71%.

Cotton futures closed with sharp losses Thursday, giving back most of the previous sessionΆs strong late-day gains.

Most-active July settled off 117 points to 85.48 cents, near the low of its 178-point inside-day range from up 19 points at 86.84 to down 159 points at 85.25. It posted the high overnight, rallied from modest losses in the early going to test the high, and retreated into the finish.

Spot May also closed down 117 points, settling at 83.43 cents after trading from 84.86-83.31, while December finished down 79 points to 85.08 cents, six ticks off the low of its 127-point range.

Uncertainties about how mills in China, the worldΆs largest cotton consumer and importer, would react to some changes in the auctioning of supplies from the countryΆs huge national reserves appeared to overshadow positive U.S. weekly export sales, a trader said.

Volume slowed to an estimated 23,600 lots from 31,616 lots the previous session when spreads totaled 12,167 lots or 39% and EFP 4,823 lots. Options volume totaled 1,464 calls and 1,874 puts.

China announced that for the first time its auctions of cotton from the state reserves would include 2012-crop supplies as well as an unspecified amount of reserve stocks imported in 2011, Dow Jones reported.

Offerings now are expected to include larger proportions of higher qualities than have been available in auctions thus far. The auction catalog for Thursday was to include 2,431 metric tons of 2012-crop cotton, 3.5% of a total listing of 70,135 million.

Mills are reported to have bought 1.16 million metric tons (5.34 million 480-pound bales) at the auctions since mid-January and 1.656 million tons (7.61 million bales) since last fall.

Separately, the China National Cotton Exchange said qualified mills have been allowed to buy more reserve cotton. Mills can buy reserve cotton to meet up to eight months of consumption, the exchange said, compared with two months before.

Net U.S. all-cotton export sales of 226,200 running bales for shipment this season during the week ended April 11, up from 152,700 the previous week, boosted 2012-13 commitments to 12.007 million RB.

Commitments expanded the lead over year-ago cumulative sales to 542,400 RB or nearly 5% and totaled 95% of the USDA forecast. A year ago, when weekly cancellations outweighed new sales, commitments were 100.9% of final shipments.

Net upland sales of 211,200 RB, up 44% from the previous week and 53% from the prior four-week average, included 115,200 bales or 55% for China, 20,600 for Vietnam, 16,500 for Hong Kong, 13,400 for Indonesia and 12,800 for Turkey.

All-cotton shipments rose to a robust 423,000 bales, third highest of the crop year, and brought the total for the season to 8.958 million RB, widening the lead over exports a year ago to 1.487 million or 20%.

Shipments stood at 71% of the forecast, compared with 66% of final exports at the corresponding point last season. To achieve the estimate, shipments need to average roughly 243,500 RB a week.

New-crop sales of 36,000 bales brought 2013-14 commitments to 1.336 million RB, up 363,500 from forward bookings a year ago.

Futures open interest fell 3,647 lots Wednesday to 181,014, with MayΆs down 6,710 lots to 13,652, JulyΆs up 3,311 lots to 116,358 and DecemberΆs down 279 lots to 48,609.

Certificated stocks grew 9,810 bales to 477,945. There were 9,921 newly certified bales, 111 bales decertified and 12,660 bales awaiting review.

World values as measured by the Cotlook A Index gained 105 points Thursday morning to 92.70 cents. The index premium narrowed 25 points to 8.05 cents to WednesdayΆs May futures settlement and 18 points to 6.05 cents to the July close.