Underlying mill buying and bouts of short-covering have helped cotton futures to eke out small gains in the face of statistically bearish supply-demand estimates.

Benchmark December edged up 65 points for the week ended Thursday to close at 64.67 cents, finishing in the upper third of a 198-point range. It slipped to a six-session low on the heels of USDAΆs supply-demand report, falling to 63.29 cents, and rallied the next day to its highest intraday price at 65.27 cents since July 29.

The market absorbed forecasts for 2014-15 ending stocks to rise from month-ago projections by 400,000 bales to 5.6 million in the United States and to dip 600,000 bales globally to a still record high 105.08 million.

U.S. crop prospects rose 6 percent on the month to 17.502 million bales, around the top end of most expectations. The increase reflected mainly lower expected abandonment of 1.13 million acres, or 9.9 percent. Yields are expected to average 820 pounds, against 821 pounds last year and the five-year average of 819 pounds.

The all-cotton output, which would be the largest in four years if achieved, includes 16.946 million bales of upland, up 38 percent from last year, and 556,000 bales of Pima, down 12 percent. Producers expect to harvest 10.241 million acres of all cotton, up 36 percent from 2013, including 10.065 million acres of upland and 175,900 acres of Pima.

Export prospects increased 500,000 bales to 10.7 million on stronger foreign import demand and the larger available supply. Domestic mill use remained at 3.8 million bales. Beginning stocks fell 100,000 bales on preliminary ending stocks indications for 2013-14, including a 30,000-bale increase in exports.

Ending stocks for 2014-15 are forecast at 39 percent of total market offtake, which would be the largest stocks-to-use ratio since 2007-08. The projected marketing-year average farm price fell to 58 to 72 cents, with the midpoint of 65 cents down from 73 cents foreseen a month ago and 77.50 cents last season.

The USDA estimate for a Texas High Plains crop of 4.4 million bales, up 1.954 million bales, or 80 percent, from last year, met some skepticism.

The estimate — more than the entire state produced last year — is based on conditions around Aug. 1, and a large acreage of dryland cotton that missed spotty showers has lost ground since then.

Moisture-stressed cotton is blooming at or near the tops of plants, at or near early cutout, and abandonment could rise unless broader rain coverage is received soon. Dryland acres comprised 62 percent of the planted area last year.

Irrigated cotton still shows “good promise,” industry sources say, but also will need an open fall to achieve its yield potential. September often is a “make or break” month for irrigated cotton, while August frequently can be the same thing for the dryland crop.

The USDA projected acres for harvest at 3.280 million, up from 1.674 million last year, with abandonment estimated at 800,000 acres, or 19.6 percent, off plantings of 4.080 million acres. Growers last year planted 3.751 million acres and abandoned 55.4 percent.

Yields are expected to average 644 pounds an acre, against 701 pounds last year when irrigated acreage was 61 percent of the harvested area.

The High Plains crop is estimated at 62 percent of the Texas output and 26 percent of the U.S. upland production. The Texas upland crop of 7.1 million bales is up 70 percent from last year.

Globally, production prospects climbed 1.22 million bales to 117.64 million and consumption rose by 1.26 million bales to 112.60 million. Beginning stocks fell 600,000 bales to 99.96 million owing to 2013-14 adjustments for several countries.

Consumption rose 1.1 percent from last month and 3.9 percent from last season to the highest since 2010-11 as lower prices are expected to boost cottonΆs share of textile fiber use.

Stocks in the rest of the world outside China projected to grow about 4 million bales from 2013-14 to 42.72 million.

On the export scene, U.S. sales for shipment this season of 179,700 running bales during the week ended Aug. 7, down from 252,300 bales the previous week, brought 2014-15 commitments to 4.614 million RB.

Commitments stood 1.212 million bales, or 36 percent, ahead of sales a year ago and were about 44 percent of USDAΆs upwardly revised export estimate. A year ago, sales were a third of final 2013-14 shipments.

Shipments of 99,200 running bales, down from 147,400 bales, left exports after the first full week of the new marketing year needing to average roughly 201,600 bales a week to achieve the forecast. Sales averaging approximately 113,100 running bales would match the export projection with no bridge carryover.

On the crop scene, U.S. conditions declined slightly during the week ended Aug. 10, with good to excellent down a percentage point to 52 percent, fair up a point to 34 percent and poor to very poor unchanged at 14 percent.

A year ago, good to excellent was 43 percent, fair 32 percent and poor to very poor 25 percent. The DTN cotton conditions index dipped to 132 from 133, up from 92 last year.

Cotton setting bolls rose to 83 percent, up from 70 percent a year ago and 80 percent for the five-year average. Boll opening at 7 percent was up from 5 percent last year but below the average of 9 percent.

Meanwhile, trend-following funds boosted their net shorts by 982 lots or 7 percent to 14,217 lots in U.S. futures-options combined during the week ended Aug. 5.

This marked the fifth straight week they have been net short. Index funds — the only group net long — pared their net long position by 1,436 lots to 55,711 lots. Traders with non-reportable positions raised their net shorts by 1,400 lots to 4,144. Commercials reduced their net shorts by 3,819 lots to 37,350, adding 6,340 longs along with 2,521 shorts.