Fund reallocations, mill fixations on pullbacks and program trading contributed to another mixed finish in cotton futures last week.

Spot March was the only loser for the week ended Thursday, finishing down 162 points to 141.22 cents, while May rose 199 points to 137.22 cents, July added 171 points to 128.25 cents and December gained 177 points to 100.97 cents.

The new-crop delivery, which hit three new contract highs during the period, climbed as high as 102.50 cents in a bid for expanded acres against other acreage-competing crops.

High-frequency or algorithmic trading played a role in what one analyst called some “wild and crazy” price action. This involves a series of quick in-and-out trades with relatively little change in open interest, analysts said, noting that order flow pushed prices at times well beyond what has been traditional movement during a session.

Index fund rebalancing of their long holdings to align with new weightings for 2011 contributed to pressure on March. Some estimates indicated the rebalancing could involve selling 13,000 to 14,000 lots. Unfixed mill on-call sales based in March totaled 27,031 lots as of Dec. 31, down 1,515 lots from a week earlier.

Cash grower sales quickened on The Seam to 34,563 bales from 18,412 bales the previous week. Prices jumped 453 points to average 135.96 cents, reflecting a 496-point leap to 82.08 cents in premiums over loan redemption rates.

Net U.S. all-cotton export sales cancellations of 33,500 running bales for delivery this season prompted mixed interpretations. Some analysts saw the USDA report as evidence of price-rationing, while others viewed it as underscoring extreme supply tightness and possibly indicating the crop may have been oversold.

Upland cancellations of 152,400 running bales exceeded gross sales of 111,500 bales during the week ended Dec. 30. This resulted in a net upland reduction in 2010-11 commitments of 40,000 bales, partly offset by net new Pima sales of 7,300 bales.

Current-crop commitments still totaled 13.954 million running bales, 91 percent of the USDA export estimate. Strong new-crop sales of 202,600 running bales lifted 2011-12 commitments to 1.932 million bales, a sizable portion of which is expected to be shipped from existing stocks early next season prior to volume movement of the 2011 crop.

It is estimated, meanwhile, that only about 10 percent of projected world trade of 8.3 million metric tons or about 38 million bales is still available for purchase at this relatively early stage of the marketing year, according to the International Cotton Advisory Committee.

“The scarce uncommitted supply may provide strong pressure on prices and cause increased volatility through the rest of the season,” the ICAC secretariat said in a report.

U.S. export commitments have reached about 90 percent of ICAC’s forecast for the marketing year ending July 31. The United States is the world’s largest cotton exporter, accounting for an estimated 41 percent of global exports this season.

Exports by India, the world’s second-largest exporter, have been capped by the government and all have been committed, ICAC noted, and Central Asian commitments are estimated at 85 percent of the projected 2010-11 shipments.

While Australia and Brazil are expanding production substantially, responding to record prices, this cotton will not become physically available until April.

Limited supplies and robust demand spurred the Cotlook A Index of world values from 86 cents on Aug. 2 to a record high 186.25 cents on Dec. 22. The index retreated to 171.95 cents to end the calendar year, with the season average of 129 cents 66 percent higher than the 2009-10 average of 77.54 cents, ICAC said. U.S. cotton futures followed similar trends.

Uncertainties about losses to flooding in Australia reminded traders of the supply crunch. Australia’s crop was forecast last month at a record 4 million bales, up 125 percent from last season. This would hike Australia’s share of world output to 3.5 percent, highest in a decade.

Some subsequent estimates raised the planted area and the crop to 4.2 million bales. Veteran traders estimated losses at 200,000 to 300,000 bales but cautioned that more time would be required to assess the situation. It’s believed doubtful USDA will have sufficient information to revise its estimate in its updated supply-demand report on Wednesday.

Elsewhere, India’s Cotton Advisory Board raised its production estimate to a record high 32.9 million bales (170 kilos or 375 pounds) from an earlier forecast of 32.5 million.

India has allowed 2010-11 exports of 5.5 million bales, about 3.5 million of which have been shipped. Government officials are expected to meet in mid-January to consider increasing the limit and possibly extending the Feb. 25 deadline for shipping the rest of the current quota.

Accelerated harvesting boosted 2010-11 crop arrivals through last Sunday to 13.69 million bales (170 kilos or 375 pounds), up 8.2 percent from 12.65 million a year ago. A recent Cotton Outlook estimate pegged the crop at 27.3 million 480-pound bales, up from USDA’s 26 million.

The market digested news last weekend that China’s booming growth in manufacturing eased slightly in December. The state-affiliated China Federation of Logistics and Purchasing said its purchasing managers index (PMI) dipped to 53.9 last month from 55.2 in November and 54.7 in October.

The decline came amid tightening policies aimed at keeping inflation in check. This was the first decline in five months but the 22nd month in a row that the PMI has stayed above 50, the benchmark for expansion. The report tempered concerns over increased monetary tightening.

On the U.S. scene, outstanding 2010-crop all-cotton loans rose 34,754 bales to 4,410,729 during the week ended Dec. 28. Entries slowed to 465,750 bales and repayments to 430,996 bales.