Fed left rates unchanged and signaled no hurry to raise them. AustraliaΆs 2016-17 cotton production projected at 2.5 million bales by FAS post in Canberra. Slower U.S. export sales expected.

Cotton futures, unable to make additional downside progress after slipping below the prior-day low in most-active July, bounced to settle modestly higher in slowed trading Wednesday.

July closed up 32 points to 64.15 cents, near the high of its 86-point range from down 42 points at 63.41 to up 44 points at 64.27 cents. It was narrowly a new high close for the move, though the session high remained below TuesdayΆs intraday peak of 64.75 cents.

December gained 21 points to close at 63 cents, its highest finish since Jan. 13, and maturing May settled up 61 points 64.07 cents.

Late in the session, the Federal Reserve left interest rates unchanged and signaled no hurry to raise them in the weeks ahead, citing a mixed economic backdrop and lingering concerns about low inflation and global economic and financial developments, Dow Jones Newswires reported.

Volume slowed to an estimated 21,597 lots from 25,411 the previous session when spreads accounted for 7,807 lots or 31%, and EFS 1,095 lots. Options volume totaled 5,377 calls and 1,997 puts.

Looking ahead, the U.S. Foreign Agricultural Service post in Canberra has projected AustraliaΆs 2016-17 cotton production at 2.5 million bales, up 100,000 bales from its estimate for 2015-16.

The postΆs estimate for the current marketing year is 4% below USDAΆs official April projection as a result of adverse weather. The USDA will update its supply-demand estimates for 2015-16 and issue its first official forecasts for 2016-17 on May 10.

Cotton prices appear promising when compared with alternative summer crops such as sorghum, the post report said.

The FAS post projected 2016-17 exports at 2.75 million bales, same as USDAΆs official estimate for 2015-16. Australia is one of the worldΆs largest cotton exporters.

Cotton is predominantly irrigated and grown in New South Wales and southern Queensland. The crop is planted from September in Queensland to mid-November in NSW and harvested from May to June, respectively.

Australia produces the worldΆs highest cotton yields owing to the predominance of irrigation and the use of genetically modified varieties.

Dryland cotton has declined in recent years but is expected to account for 15% of the estimated 2015-16 harvest area of 263,000 hectares or 649,873 acres because of favorable conditions.

AustraliaΆs cotton industry is considered the most water-efficient in the world and has achieved a 40% increase in water productivity over the last decade. Major factors have been the introduction of more drought tolerant varieties and water-saving technology as well as a significant research effort funded by a levy on production.

Cotton appears to provide a higher return per mega liter of water than a number of other crops, the post said, and this has encouraged farmers to switch to the fiber crop.

Meanwhile, slower U.S. upland export sales for shipment this season from 104,800 running bales the prior week are generally expected to be shown for the week ended April 21. The weekly USDA report is set for release at 7:30 a.m. CDT Thursday.

Upland sales have averaged 121,670 RB the last four weeks and upland shipments have averaged 227,190 RB. Closing prices during the latest reporting week ranged from 60.02 to 64.09 cents, basis July futures, compared with 59.56 to 61.29 cents the prior week.

Futures open interest increased 304 lots to 191,716 Tuesday, with MayΆs down 168 lots to 186, JulyΆs down 420 lots to 113,650 and