By Duane Howell
For A-J Media

U.S. cotton futures bounced off a 14-week low to register a modest gain in spot March on supportive supply-demand estimates last week.

March gained 47 points for the week ended Thursday to close at 61.90 cents, rallying from 61.15 cents on Monday, its lowest intraday price since Oct. 9, to a six-session high of 62.46 cents on Thursday. December lost 26 points to settle at 62.71 cents.

Worries about global economic conditions amid a gloomy outlook in outside markets restrained rally attempts in cotton, an economically sensitive industrial commodity.

Cash online grower-to-business sales quickened to 79,841 bales from 12,166 bales on The Seam. Prices rose to an average of 56.81 cents, reflecting gains to 9.35 cents from 8.19 cents in premiums over loan repayment rates. Daily average prices ranged from 56.31 to 57.81 cents.

A shaky macro environment appeared to overshadow USDA estimates showing a 9.21-million-bale drawdown in global ending stocks from the beginning level. U.S. estimates were about as mostly expected, with a crop shortfall now projected at 6.57 million bales.

U.S. all-cotton production is estimated at 12.943 million bales, down 88,000 bales from the December forecast and 20.7 percent from last year.

The export forecast was unchanged on the month at 10 million bales, while domestic mill use fell 100,000 bales to 3.6 million for a total offtake of 13.6 million bales. Ending stocks are forecast at 3.1 million bales, up from 3 million projected last month but down from beginning stocks of 3.7 million.

The USDA cut the planted area by 25,000 acres to 8.581 million and reduced the harvested area by 72,000 acres to 8.077 million. This hiked abandonment to 504,000 acres or 5.87 percent from 407,000 acres or 4.76 percent. Yields edged up to 769 pounds from 768 pounds but were down from 838 pounds last year and the five-year average of 829 pounds.

By regions, upland production fell from the December forecasts by 27,000 bales to 3.816 million in the Southeast, 10,000 bales to 2.042 million in the Mid-South, 27,000 bales to 6.147 million in the Southwest and 8,000 bales to 503,000 in the West. Pima production fell 16,000 bales from the September forecast to 435,000, down 23 percent from last year.

Production on the Texas High Plains dipped 30,000 bales from a month ago to 4.0 million, up 23 percent from last yearΆs output of 3.261 million bales. Estimates rose by 30,000 bales to 640,000 in the northern district and fell 60,000 bales to 3.36 million in the southern area.

The forecast range for the marketing year average price received by U.S. producers remained at 59 cents, down from 61.30 cents last season.

Globally, USDA slashed production by 2.15 million bales from a month ago to 101.56 million and shaved mill use slightly by 450,000 bales to 110.94 million. Ending stocks fell 1.53 million bales to 102.86 million, down 8.2 percent from beginning stocks.

The production estimate reflected cuts for Pakistan, China, India and Turkmenistan. PakistanΆs crop fell 800,000 bales to 7.2 million, lowest since 1998. Mill use fell for India, Pakistan and the United States. Imports rose by 720,000 bales to 36.07 million, virtually all in Pakistan, while exports were raised for India and others.

A decline to a six-year low in estimated world ending stocks outside China commanded attention. Stocks in the rest of the world are expected to fall to 38.34 million bales, a drawdown of 5.81 million bales from beginning stocks and the smallest such carryover since 2009-10 when it was 32.8 million bales.

The stocks-to-use ratio outside China is projected to fall to 48.8 percent from 57.1 percent in 2014-15. This would be the lowest since 2003-04 when it was 44.3 percent.

A contributing factor is that cotton spinning in Vietnam has more than tripled in the last four years, with total use forecast at 5.1 million bales in 2015-16.

Vietnam accounted for half the total world growth in cotton demand during that period, according to USDAΆs Agricultural Marketing Service. Rising yarn exports have been the main source of this rapid expansion in mill use. Net yarn exports increased at an annual rate of more than 40 percent from 2011-12 to 2015-16.

China was the largest market for Vietnam yarn exports even before 2011-12, and its share has expanded further the last few years to now about 80 percent to 90 percent.

This growth is paralleled by a large rise in Chinese investment in yarn spinning in Vietnam alongside wholesale relocations of some firms. The key driver has been ChinaΆs cotton policy, which has elevated internal cotton prices enough to render many spinning operations unprofitable.

Cotton consumption for VietnamΆs domestic yarn utilization also has shown impressive growth, more than doubling since 2011-12.

Meanwhile, U.S. all-cotton export sales for shipment this season hit a six-week high of 198,100 running bales in the week ended Jan. 7, up from 92,200 RB the prior week. This boosted commitments to 5.464 million RB.

But the lag of commitments behind year-ago bookings still widened 249,000 RB to 2.653 million RB or to 33 percent. Commitments were 56 percent of the USDA estimate, compared with 74 percent of final shipments at the corresponding point last season.

Shipments fell to an eight-week low to 84,700 RB, down from the prior weekΆs 172,200 RB, and nudged the total for the season to 2.524 million RB. The gap behind exports a year ago widened to 240,000 RB or 9 percent.

Shipments amounted to 26 percent of the USDA projection, compared with 25 percent of final exports a year ago.

To achieve the USDA forecast, shipments now need to average roughly 247,500 RB a week, while sales averaging approximately 146,100 RB would match the export projection.

Sales for shipment next season of 7,800 RB raised 2016-17 commitments to 749,100 RB, widening the lead over forward bookings a year ago to 185,700 RB.