Speculative long liquidation pounded cotton futures as fears of a global recession hammered commodity and equity markets last week.

Benchmark December tumbled 1,233 points for the week ended Thursday to close at 99.29 cents, extending a losing streak to six sessions in a row and settling at its lowest finish since Aug. 11.

December tried to make a stand around 100 to 101 but succumbed as a selling frenzy swept through outside markets amid a bleak U.S. outlook from the Federal Reserve, weak data from China and new signs of a slowdown in Europe.

The dollar surged to a seven-month high against other currencies, while the Reuters-Jefferies CRB index, a 19-commodity global benchmark, fell to its lowest point since early December.

Cotton chewed through underlying commercial buying as prices fell to new six-week lows. Mills fixed prices on some of their lopsided on-call holdings. Chinese mills were reported buying before their quotas expire.

Cash trading dwindled on The Seam. Only 185 bales changed hands on the grower-to-business exchange. Prices averaged 80 cents, reflecting premiums of 31.76 cents in premiums over loan redemption rates.

Business-to-business sales fell to 1,222 bales from 7,241 bales the previous week. The cotton brought prices averaging 88.11 cents, down from 103.67 cents, and premiums of 41.87 cents, down from 51.31 cents.

First notice day arrives Monday for the thinly traded October futures delivery. With only 218 lots (21,800 bales) open going into ThursdayΆs session, the notice period appears unlikely to produce any big fireworks.

OctoberΆs discount to December widened to a settlement difference of 165 points. Stocks in deliverable position grew 2,391 bales to 28,963 bales. There were 1,228 bales awaiting review.

U.S. export sales totaled a light 66,300 running bales during the week ended Sept. 15. But at least the USDA report showed some net sales. A week earlier, cancellations of 170,600 bales had underscored available world import demand focusing on more competitively priced foreign growths.

Gross upland sales were 71,800 bales and cancellations were 5,800 bales. Largest buyers included Turkey, 28,900 bales; China, 15,400; and Vietnam, 12,600. Optional origin sales remained at 716,200 bales for the season. No new-crop sales were reported.

Shipments slowed to only 59,900 running bales from just 64,800 bales the week before. Exports for the season totaled 703,400 bales, down from 1.271 million bales a year ago. Shipments were 6 percent of the crop year forecast. This compared with 9 percent of final exports a year ago.

A tightened shortfall of foreign production to foreign mill use is considered indicative of reduced U.S. export potential. However, mills now need to replenish depleted inventories, sources say, and China has begun rebuilding its strategic state reserves.

Foreign mill use is expected to exceed foreign production by 5.01 million bales, down from 5.22 million foreseen last month, 14.04 million bales last season and 26.10 million two years ago. The gap is the smallest since 2004-05 when it was 4.06 million bales.

U.S. exports are forecast at 12 million bales, down more than 2 million bales from last season owing to a smaller total supply and lower imports by China. With world trade projected at the highest in four years and greater export competition, the U.S. share is expected to decline to 32 percent from 41 percent in 2010-11.

On the crop scene, U.S. harvesting advanced two percentage points to 11 percent complete during the week ended Sept. 18, a point behind a year ago and a point ahead of the five-year average, USDA reported.

The harvest was most advanced in Louisiana at 47 percent done, a whopping 28 points ahead of average, followed by 16 percent in Texas, 15 percent in Arizona and 11 percent in Mississippi.

Boll opening expanded 12 points to 69 percent, up three points from a year ago and 15 points above the average. The drought and heat-stressed Texas crop was 66 percent open, up 15 points from last year and 25 points above the average.

Open cotton reached 53 percent in the Texas High Plains and 13 percent in the adjoining Rolling Plains. Producers applied harvest-aid chemicals to fields that had open bolls in the Texas High Plains and prepared for an early harvest. Growers shredded and plowed under some cotton following insurance adjustments.

Crop ratings declined to a new low for the season, with good to excellent down a point to 27 percent and poor to very poor up a point to 45 percent. A year ago, good-excellent was 58 percent and poor-very poor was 13 percent. Sixty-five percent of the Texas crop was rated poor to very poor, up a point from a week earlier.

The beltwide crop remains the worst-rated ever for this time of year, with good to excellent below the prior record low of 31 percent in 1998 and poor to very poor up from the previous high of 35 percent in 2000.

Meanwhile, trend-following funds bought a net 1,074 lots in cotton futures with options during the week ended Sept. 13 and traders with non-reportable positions bought a net 4,106 lots, according to the latest Commodity Futures Trading Commission.

This boosted their net long positions to 33,133 lots and 7,207 lots, respectively. Index traders bought a net 59 lots to edge their net longs up to 51,702 lots. Commercials sold a net 5,238 lots to raise their net shorts to 92,040 lots, adding 10,967 shorts along with 5,238 longs.

Separately, CFTC disaggregated data showed managed-money traders bought 3,011 lots to hike their net longs to 34,342, while swaps dealers sold a net 616 lots to trim theirs to 25,337 lots.

The buildup of hefty speculative longs, especially among small traders, generated subsequent long liquidation selling as prices broke through support points. Futures open interest fell 6,108 lots from a week earlier to 149,373, lowest since Sept. 6, heading into ThursdayΆs session.