By Duane Howell

Long liquidation and changes in state reserve auction procedures in China contributed to pressure on cotton futures last week.

Most-active July shed 126 points for the week ended Thursday to close at 85.48 cents, six ticks above its settlement on Tuesday, which was its lowest finish since Feb. 27. It staged a bullish outside-range reversal on Wednesday, gave up nearly all those gains on inside-day price action on Thursday and remained at the close below its 50-day moving average.

Spot May lost 118 points to close at 83.48 cents and December slipped 58 points to settle at 85.08 cents.

With first notice day for May deliveries looming on Wednesday, open interest coming into Thursday fell 2,617 lots from a week ago to 181,014, smallest since mid-January, with MayΆs down 44,900 lots to 13,652.

Certificated stocks expanded 36,552 bales to 477,945, a new high since June 2010. There were 12,660 bales awaiting review.

Weak U.S. factory data and disappointing economic data out of China raised new concerns about global growth and contributed to pressure on economically sensitive cotton futures.

Cash grower-to-business sales dwindled to 1,136 bales on The Seam from 2,738 bales the previous week. The cotton changed hands at an average price of 81.46 cents, up from 80.13 cents, reflecting gains to 28.06 cents from 26.92 cents in premiums over loan repayment rates. Daily price averages ranged from 75.98 to 82.03 cents.

Healthy U.S. export sales and shipments were overshadowed by an announcement that ChinaΆs auctions from its huge reserves now for the first time will include 2012-crop domestic offerings as well as some 2011 imports. The offerings are expected to include larger proportions of higher qualities than have been available thus far.

Separately, the China National Cotton Exchange said mills can buy reserve cotton to meet up to eight months of consumption, compared with two months before.

U.S. all-cotton export sales for shipment this season rose to 226,200 running bales during the week ended April 11 from 152,700 bales the previous week. Upland sales of 211,200 bales, up 44 percent from the prior week and 53 percent from the prior four-week average, included 115,200 bales or 55 percent to China.

All-cotton shipments of 423,000 bales were the third largest of the crop year, with upland exports of 391,100 bales up 46 percent from the week before and 27 percent from the previous four-week average.

On the crop scene, U.S. planting crept three percentage points to 8 percent done during the week ended April 14, behind 13 percent a year ago and the five-year average of 10 percent.

Growers had planted 35 percent in both Arizona and California, while Texas at 10 percent lagged four points behind its average and eight points behind a year ago. Elsewhere, 2 percent had been planted in Alabama, 1 percent in Georgia and 6 percent in North Carolina.

No cotton was reported planted in the Delta. Wet conditions there have delayed corn planting and may result in some of those acres being shifted into cotton, reports have indicated.

However, a Delta source, while acknowledging that any further delay in corn planting could result in more cotton acreage, also said he would guess that the bulk of the intended corn acres could go into soybeans simply because many people have sold their cotton pickers.

New questions about the acreage that may be planted in cotton also have arisen in the Texas High and Rolling Plains after hard freezes threatened the winter wheat crop in the second week of April.

Calvin Trostle, Texas A&M AgriLife Extension Service agronomist in Lubbock, and Clark Neely, extension state small grains and oilseeds specialist in College Station, attended a series of meetings to help evaluate samples brought by participants and to conduct training sessions on spotting freeze damage.

“We have indeed unquestionable and major potential injury on our wheat crop for grain,” Trostle said in an extension release. “The absolute temperature is one factor and the duration of those temperatures is another. When combined, these two issues significantly raise the injury potential.”

Temperatures fell to around 20 to 22 degrees in the northwest Plains and north of Lubbock, 20 degrees in the Amarillo area, 22 to 25 degrees in the southeast Panhandle, and about 15 to 20 degrees north of the Canadian River. Some areas were below 28 degrees for about 24 hours.

With wheat producers and others still evaluating crop conditions prior to another freeze last week, the acreage that might be replaced with cotton is uncertain.

But some knowledgeable industry sources at Lubbock estimate at the moment that cotton plantings on the High Plains could range from roughly 3.75 million to 3.9 million acres, down about 8 percent to 11 percent from last yearΆs 4.22 million.

This would allow for some freeze-damaged wheat to be replaced with cotton, depending upon a lot of variables — weather prior to cotton planting time, individual crop insurance situations, and possible replacement with grain sorghum, among others.

Mounting concerns about dry soils in the Plains as planting time approaches have contributed to December futures gaining on the July contract in straddle trading.

Meanwhile, trend-following funds sold 12,673 lots in futures-options combined during the week ended April 9 to slash their net long position by 16.8 percent to 62,659 lots, according to traders-commitments data.

The May contract that week fell 383 points or 4.8 percent and hit was then the lowest intraday print since March 4. Index funds bought 626 lots to increase their net longs to 71,013 lots, while small traders sold 3,993 lots to reduce theirs to 10,318 lots.

Commercials bought 16,040 lots, covering 14,542 shorts and adding 1,497 longs to shave their net shorts to 143,990 lots.