A tight U.S. supply in the worldΆs largest cotton exporter continued to offer support, though a decline is generally expected in the USDA weekly export sales report on Thursday.

Cotton futures rallied from a triple-digit loss to overcome macroeconomic headwinds and finish Wednesday on a new seasonal high close in spot May for the second straight session.

The May contract finished up 55 points to 92.20 cents, in the upper third of its 249-point range from down 121 points at 90.44 to up 128 points at 92.93 cents. It climbed to a three-session high after falling to a four-session low.

July edged up 15 points to close at 90.23 cents and December settled off a point to 79.88 cents.

Volume climbed to an estimated 23,000 lots from 15,417 lots the previous session when spreads totaled 6,470 lots, EFP 37 lots and EFS 56 lots. Option volume totaled 6,791 calls and 3,706 puts.

Tight U.S. old-crop supplies in the worldΆs largest cotton exporter continued to offer support, though USDAΆs export sales report for the week ended March 6 is generally expected to show a decline from the prior weekΆs net upland sales of 159,500 running bales.

The report, set for release at 7:30 a.m. CDT Thursday, will be viewed for indications as to whether higher prices have begun to ration demand. Net upland sales the prior week reflected gross sales of 206,300 bales and cancellations of 46,800 bales.

Closing prices, basis May futures, ranged during the latest reporting week from 87.14 to 91.61 cents. Settlements averaged 88.98 cents. Intraday prices ranged from 86.36 to 91.73 cents.

Upland shipments hit a marketing year high of 363,800 running bales in the week ended Feb. 27. This raised the four-week total to 1.303 million RB, a weekly average of about 326,000. All-cotton shipments have totaled 1.37 million RB, averaging 342,600.

The USDA boosted its export estimate by 200,000 bales to 10.7 million in its monthly supply-demand report earlier this week. This is down nearly 18% from last season as lower U.S. supply and lower demand from China keep export prospects at the lowest since 2000-01.

Combined with steady domestic mill use of 3.6 million bales, total demand of 14.3 million bales would be the lowest since 1988, while the unchanged overall supply of 17.1 million bales would be a 29-year low.

Other changes among major exporters in the latest USDA 2013-14 trade outlook included downward revisions of 100,000 bales each to 3.8 million in Australia on tight ending stocks there and to 2.7 million in Uzbekistan on stronger mid-season competition.

Changes among major importers included a cut of 500,000 bales to 2 million in Pakistan on weaker demand, with increases of 200,000 bales to 3.9 million in Bangladesh on stronger consumption, 150,000 bales to 4.25 million in Turkey on greater demand and 100,000 bales to 2.9 million in Vietnam on higher mill use.

Futures open interest gained 412 lots Tuesday to 175,385, with MayΆs down 321 lots to 106,350, JulyΆs up 22 lots to 35,360 and DecemberΆs up 669 lots to 31,335.

Certificated stocks grew 753 bales to 260,495. There were 758 newly certified bales, five bales decertified and none awaiting review.

World values as measured by the Cotlook A Index eased off five points Wednesday morning to 97.30 cents. The premium to TuesdayΆs May futures settlement narrowed 14 points to 5.65 cents.