By Duane Howell
For A-J Media

A rally through the prior weekΆs high quickly lost momentum as U.S. cotton futures fell to a three-week low and finished last week with a slight loss.

Spot December dropped 37 points for the week ended Thursday to close at 61.95 cents. It posted a high of 63.85 cents on Tuesday, highest since a bearish reversal from 64.69 cents on Oct. 22, and a low of 61.76 cents on Thursday, lowest since Oct. 12.

One market analyst viewed the inability to close below the prior weekΆs low of 61.91 and thereby confirm a technical breakdown as rendering the near-term outlook unclear. Monthly supply-demand estimates are scheduled for release by USDA on Tuesday.

The market grappled with sluggish demand — export sales have been lagging sharply behind the year-ago pace — and concerns about crop quality and talk of smaller production.

December closed Wednesday at a discount to March for the first time since Aug. 12 amid ongoing index fund rolling of longs from the front contract. March eased off eight points for the week to settle at 62.13 cents, 18 points over December.

Cash grower-to-business sales increased to a weekly marketing year high of 22,192 bales from 5,440 bales. Prices rose to an average of 59.46 cents from 57.43 cents, reflecting gains to 11.18 cents from 9.27 cents in premiums over loan repayment rates. Daily average prices ranged from 56.35 to 61.31 cents.

The market bounced modestly on the heels of USDAΆs export sales-shipments report. Net all-cotton export sales for shipment this season improved to 161,000 running bales during the week ended Oct. 29 from 79,100 the previous week, boosting 2015-16 commitments to 3.825 million.

Upland sales of 147,200 bales were near the high of expectations and Pima sales reached a marketing year high of 13,800 bales.

Commitments of upland and Pima combined trailed year-ago bookings by 2.143 million bales, or by 36 percent. Cumulative sales were 39 percent of the USDA export forecast, compared with 55 percent of final shipments at the corresponding point last season.

Shipments of 166,800 running bales, a crop year high and up from the prior weekΆs 74,500 bales, boosted exports for the season to 1.413 million. This widened the lead over exports a year ago to 243,100 bales. Shipments were 14 percent of the forecast, compared with 11 percent of final exports a year ago.

To achieve the USDA forecast, shipments now need to average roughly 217,500 running bales a week, while sales averaging around 155,600 bales would match the export estimate.

On the Washington scene U.S. cotton industry groups have applauded House passage of Export-Import Bank reauthorization.

The House utilized a discharge petition, a seldom-used procedure to force a bill out of the committee of jurisdiction and bring it directly to the floor for a vote. The House passed the bill on a strong bipartisan vote of 313 to 118. Ex-Im authority expired at the end of June.

The National Cotton Council, Amcot representing marketing cooperatives, the American Cotton Shippers Association and the National Council of Textile Organizations joined in urging the reauthorization.

In a letter sent to all Cotton Belt House membersΆ offices, the groups said Ex-Im Bank is a critical financing tool for the domestic cotton and textile industries, both of which rely primarily on the ability to export a majority of U.S. production.

More than 80 percent of U.S. cotton fiber production is exported, the groups said. When combined with cotton products manufactured by the textile industry, approximately 95 percent of all U.S. cotton is exported in some form.

Three segments of the U.S. cotton industry primarily utilize Ex-Im Bank as part of their business, including textile mills, marketing cooperatives and merchants.

The bank plays a key role in the ability to remain competitive with other major cotton and textile producing countries.

The Senate earlier included Ex-Im reauthorization in its version of the highway-surface transportation bill. The most likely path for reauthorization to be enacted this year is said to be in a final House-Senate highway-surface transportation measure.

On the crop scene, U.S. cotton harvesting advanced eight percentage points to reach 50 percent complete during the week ended Nov. 1, up a point from a year ago but four points behind the five-year average, according to USDAΆs weekly progress report.

Conditions improved marginally, with good to excellent holding at 47 percent, fair rising a point to 38 percent and poor to very poor dropping a point to 15 percent. A year ago, good-excellent was 48 percent and poor-very poor was 18 percent. The DTN cotton condition index rose two points to 122, compared with 118 a year ago.

The harvest edged up three points in Texas to 40 percent complete, up from 31 percent last year but down from 43 percent for the five-year average, and progressed 11 points in Georgia to 43 percent, down from 58 percent and 51 percent, respectively.

U.S. upland classing stood at 2,918,943 running bales as of Oct. 29, compared with 3,900,444 a year ago. The total was about 23 percent of USDAΆs 2015 upland crop estimate. Tenderable cotton amounted to 58.1 percent for the season, compared with 73.6 percent a year ago.

Meanwhile, trend-following funds reduced their net longs by 2,673 lots to 36,134 in U.S. cotton futures-options combined during the week ended Oct. 27, government traders-commitments data showed.

They added 1,943 shorts and liquidated 730 longs. Index funds raised their net longs by 697 lots to 66,150, while traders with non-reportable positions flipped to net long 129 lots from net short 969 lots on a shift totaling 1,097 lots. Commercials shaved their net shorts 879 lots to 102,412, adding 2,351 longs along with 1,472 shorts.