Discounting USDAΆs monthly supply-demand estimates, spot cotton futures rose to six-month highs last week before giving back half the advance in heavy, spread-laden activity.

Spot March gained 129 points for the week ended Thursday to close at 87.60 cents, about the midpoint of its 347-point trading range from 85.84 to 89.31 cents. It posted the highest intraday price since Aug. 19.

Most-active May, which took over the open interest leadership, advanced 166 points to 88.58 cents, trading from 86.48 to 89.67 cents. July gained the most, rising 175 points to 88.22 cents, and December finished up 92 points to 78.15 cents. Old-crop July traded at premiums as wide as 1,110 points over new-crop December.

With traders rolling positions forward from March ahead of first notice day for March deliveries on Feb. 24, spreading accounted for as much as 73 percent of daily volumes ranging from 44,600 lots to 58,500 lots. The volume as the big Goldman Sachs roll ended Thursday was the largest since June 17.

Cash grower-to-business sales jumped to 30,922 bales from 13,423 bales the previous week. Prices climbed 243 points to average 80.23 cents, reflecting gains to 27.31 cents from 26.25 cents over loan repayment rates. Daily average prices ranged from 77.68 to 82.07 cents.

Net U.S. all-cotton export sales for shipment this season declined to 127,900 running bales during the week ended Feb. 6, down 64 percent from the previous four-week average. Gross sales were 193,000 bales and cancellations were 65,100 bales, including 41,600 bales by China.

But the sales for a week in which China was on holiday for the Lunar New Year lifted 2013-14 commitments to about 9 million RB, about 88 percent of the USDA export estimate. A year ago, commitments were 82 percent of final 2012-13 shipments.

All-cotton shipments remained brisk at 360,800 running bales, up 22 percent from the previous four-week average of upland and Pima combined. Shipments reached 4.719 million running bales, 46 percent of the USDA forecast, against 43 percent of final shipments at the corresponding point last season.

To achieve the USDA estimate, all-cotton shipments need to average roughly 227,800 running bales a week, while weekly sales averaging only around 49,400 RB would match the export forecast.

The market shrugged off what was considered a disappointment for the bulls when USDA stuck with its estimates of U.S. exports of 10.5 million bales and ending stocks of 3 million bales. Expectations on average were for a 200,000-bale export hike and a corresponding cut in ending stocks.

The crop estimate was unchanged at 13.187 million bales, as expected, and domestic mill use also held steady at 3.6 million bales.

The USDAΆs average price projection for the marketing year narrowed to 74 to 78 cents at the producer level, with the midpoint of 76 cents up from 74.5 cents foreseen last month.

U.S. all-cotton ginned prior to Feb. 1 totaled 12.406 million running bales, down 25 percent from 16.547 million RB a year ago. Converted to statistical bales, the ginning totaled around 408,000 bales below the USDA crop estimate. End-of-season ginning data will be reported in March.

Globally, USDA lowered production 1.14 million bales to 116.67 million and cut ending stocks by a corresponding amount to a still record high 96.47 million bales. World consumption was virtually unchanged at down just 20,000 bales at 109.48 million. Offsetting adjustments resulted in global trade holding steady at 38.5 million bales.

The crop estimate for China fell a million bales to 32 million, reversing a surprising million-bale increase last month after “additional information about re-classing in Xinjiang” indicated lower production than previously thought. This resulted in a million-bale reduction in ChinaΆs ending stocks to 57.31 million, 59 percent of the world carryout.

Ending stocks in the rest of the world outside China dipped 140,000 bales from a month ago to 39.16 million, up from 38.8 million bales in 2012-13 but down from 42.24 million bales in 2011-12.

Looking ahead, the National Cotton CouncilΆs early intentions survey showed U.S. producers plan to plant 11.261 million acres of cotton, up 8.2 percent from 2013. Intentions are 11.037 million acres for upland, up 8.1 percent, and 225,000 acres of Pima or extra-long staple cotton, an 11.8 percent increase.

With abandonment projected at roughly 15 percent, the all-cotton harvested area would total 9.59 million acres. And a national average yield of 819 pounds produce a crop of 16.37 million bales — 15.72 million of upland and 657,000 of Pima.

If realized, this would be an increase of 3.2 million bales from the current estimate of the 2013 production. Abandonment last year totaled 26.4 percent, leaving 7.664 million harvested acres, and yields averaged 826 pounds.

Growers are approaching the planting season with the December futures contract trading about 5 cents below year-ago levels, economists pointed out. However, corn and soybean prices have declined even more, and relative price ratios are more favorable for cotton.

On the demand front, the council economists expect lower imports by China to translate into smaller U.S. exports. They forecast exports at 10 million bales, down 500,000 from 2013-14 and the smallest since 2000.

Domestic mill use is expected to reach 3.7 million bales, up from this seasonΆs 3.6 million and the low of 3.3 million bales in the 2011 marketing year brought about by the price spike early that year.

Putting the full balance sheet together, the council economists expect the 2014 marketing year to close with stocks of 5.7 million bales, 41 percent of total use. This would be the largest carryout since 2008-09 and the highest stocks-to-use ratio since 2007-08.

The council projected ChinaΆs imports at 6.4 million bales, down about 42 percent from 11 million bales forecast for this season.