Old-crop supply-demand estimates viewed as more negative than expected. U.S. 2014 crop estimate came in below expectations at 14.5 million bales but market offtake also cut.

Cotton futures settled mixed in light dealings Friday, with old-crop supply-demand estimates coming in more negative than expected and the U.S. production forecast below most private projections.

Spot July dropped 69 points to close at 92.36 cents, in the lower quarter of its 171-point range from up 66 points at 93.71 to down 105 points at 92 cents.

December edged up 20 points to 83.71 cents, finishing in the upper half of its 97-point range from up 56 points at 84.07 to down 41 points at 83.10 cents.

Both July and December posted session lows on the heels of the USDA report. Weather concerns and the rolling of speculative longs from July to December appeared to support the new-crop contract. For the week, July lost 196 points and December dipped 23 points.

Volume slowed to an electronically estimated 10,400 lots from 17,151 lots the previous session when spreads totaled 5,467 lots or 32% and EFP 345 lots.

The USDAΆs first U.S. 2014-15 supply-demand estimates pegged crop prospects at a smaller-than-expected 14.5 million bales, based on the March planting intentions report and the most recent two-year regional average abandonment and yields.

Abandonment is projected at 24% owing to ongoing severe drought in the Southwest. Yields are estimated at 824 pounds per harvested acre, against 821 pounds in 2013-14 and the five-year average of 817 pounds.

Lower world import demand is expected to cut U.S. exports by 7% from this season to 9.7 million bales, while domestic mill use is forecast to rise by 100,000 bales to 3.7 million. Total offtake is projected to fall 600,000 bales or 4.3% to 13.4 million.

Ending stocks are projected to grow to 3.9 million bales from beginning stocks now estimated at 2.8 million bales. The stocks-to-use ratio of 29.1% is up from 20% now forecast for this season and is about equal to the previous 10-year average.

The USDA forecast the average 2014-15 producer price within a range of 63 to 83 cents, with the midpoint of 73 cents down from 77.50 cents estimated for 2013-14.

Globally, the initial 2014-15 projections put ending stocks at a larger-than-expected 101.66 million bales, a new all-time high and up from beginning stocks now pegged at 97.91 million bales.

Production is projected down 1.4% from 2013-14 to 115.5 million bales as reductions mainly in China, Australia and India are partially offset by increases in the United States, Brazil and Turkey.

Consumption is expected to rise more than 2% to 111.83 million bales, based on projected growth in the world economy and expected reductions in ChinaΆs price support levels.

Beginning stocks in China are expected to reach nearly 60 million bales, more than 60% of total world stocks. ChinaΆs imports are projected to fall about a third to 8.5 million bales, with the government considered likely to restrict imports in favor of consumption of domestic cotton.

China accounts for virtually all the expected 10% reduction to 36.29 million bales in world trade. With ChinaΆs ending stocks expected to grow slightly, world stocks outside China would rise by 2.8 million bales or about 7% to 41.15 million.

For 2013-14, the final U.S. crop estimate of 12.9 million bales is little changed from April, as expected, but a 300,000-bale cut in exports because of the recent fall-off in sales resulted in a corresponding increase in ending stocks. ChinaΆs imports rose by 750,000 bales to 12.75 million and IndiaΆs exports by 800,000 bales to 8.8 million.

Futures open interest edged up 592 lots Thursday to 196,506, with JulyΆs down 272 lots to 212,732 and DecemberΆs up 735 lots to 66,998. Certificated stocks grew 8,709 bales to 374,099. There were 8,717 newly certified bales, eight bales decertified and 4,606 bales awaiting review.

World values as measured by the Cotlook A Index gained 50 points Friday morning to 94.30 cents. The premium to ThursdayΆs July futures settlement was unchanged at 1.25 cents.

Forward A Index values for 2014-15 fell 55 points to 90.70 cents, widening the discount to the 2013-14 index by 105 points to 3.60 cents and narrowing the premium to ThursdayΆs December futures close by 15 points to 7.19 cents.