By Duane Howell

Bullish USDA crop estimates and friendly supply-demand forecasts have powered cotton futures to new highs for the move.

Benchmark December advanced 254 points for the week ended Thursday to settle at 91.79 cents, highest spot close since March 15. December jumped to a high Tuesday of 92.54 cents, its highest intraday print since February 2012.

At the high, December had surged 769 points or 9.1 percent from the low of just six sessions earlier. March gained 180 points for the week to settle at 88.96 cents.

The USDA reports featured production cuts for the United States and China, the lowest U.S. supply of 16.86 million bales — beginning stocks plus the crop — since 1984 and slightly lower world ending stocks. A large portion of the projected world carryout, still a record high, is in ChinaΆs national reserve and unavailable to the rest of the world.

U.S. all-cotton production is pegged at 13.053 million bales in the seasonΆs first survey-based estimate, down 450,000 bales from the July forecast and nearly 4.3 million below last seasonΆs crop.

This would be the smallest crop since 2009. Abandonment is estimated nationally at 25 percent, virtually the same as last season, with yields expected to fall to an average of 813 pounds from 887 pounds in 2012-13, mainly because of a 17 percent reduction in the Southeast from last yearΆs record.

The projected yield is four pounds below the five-year average.

Upland output is projected at 12.473 million bales and Pima output at 580,000 bales, down from 16.535 million and 780,000 bales, respectively, last season.

By regions, upland production fell 1.42 million bales to 4.451 million in the Southeast, 1.542 million bales to 2.7 million in the Mid-South, 855,000 bales to 5.225 million in the Southwest and 245,000 bales to 952,000 in the West.

Compared with last month, the 2013-14 estimates include a marginal 100,000-bale cut to 3.8 million in beginning stocks and a 400,000-bale reduction to 10.6 million in exports. Domestic mill use is unchanged at 3.5 million bales.

Exports for 2012-13 were shaved 200,000 bales to 13.1 million, but USDA raised “unaccounted for” cotton by 310,000 bales to arrive at the slight reduction in the old-crop carryout.

Ending stocks for 2013-14 now are projected at a perilously low 2.8 million bales, down 100,000 from the July forecast and a million bales below the revised old-crop carryout. The stocks would be 20 percent of total offtake, lowest in three years.

The USDA narrowed its farm price forecast for the 2013-14 marketing year by 2 cents on each end from a month ago to 72 to 88 cents. The midpoint remained at 80 cents, up from 72 cents last season but down from 88 cents in 2011-12.

Globally, USDA trimmed ending stocks a marginal 570,000 bales from a month ago to 93.77 million, raised beginning stocks 770,000 bales to 86.35 million, cut production 1.64 million bales to 116.38 million and inched consumption up 60,000 bales to 109.85 million.

ChinaΆs crop fell a million bales to 33 million and ending stocks there dropped 670,000 bales to 58.26 million, 62 percent of the world carryout. Stocks in the rest of the world outside China are forecast to fall 510,000 bales from 2012-13 to 35.51 million.

IndiaΆs crop was unchanged on the month but stocks were raised from 2011-12 forward owing to residual “loss” adjustments as official data used to estimate production, trade and mill use indicated “unsustainably low stock levels.” IndiaΆs exports rose in 2012-13 and 2013-14.

Rains this month may bolster crop prospects in the Texas High Plains, which despite heavy abandonment is expected to produce more cotton this season than any state except of course the one of which it is a part.

The High Plains crop is projected at 2.575 million bales, down from 2.947 million the previous year but up from 1.835 million in the historic drought of 2011. Abandonment is estimated at 49.7 percent, against 44 percent last year and a record 66 percent two years ago.

Yields are expected to average 665 pounds per acre off 1.86 million acres for harvest, up from 608 pounds last year and 567 pounds in 2011. The planted area fell 11.5 percent from 2012 to 3.7 million acres.

The adjoining Rolling Plains crop on the east is projected at 715,000 bales, up from 531,300 bales last season, with yields expected to edge up to an average of 426 pounds from 423 pounds. Plantings fell 16 percent from last year to 995,000 acres, but abandonment dropped to 24 percent from 49 percent and acres for harvest rose to 805,000 from 602,000.

Combined, the crop in the High and Rolling Plains is forecast at 3.29 million bales, down 5.4 percent from last seasonΆs 3.479 million, off yields averaging 593 pounds, up from 570 pounds.

On the demand scene, with supply constraints expected to limit exports, net U.S. all-cotton export sales fell to 56,500 running bales during the week ended Aug. 8 from 96,100 bales the previous week.

Upland net sales of 38,500 bales, down from the prior weekΆs 81,400 bales, reflected gross sales of 94,800 bales and cancellations of 56,300 bales. Buying destinations included Mexico, Indonesia, Taiwan, Turkey and Vietnam, with cancellations by Japan, Peru and China.

Shipments rose to a strong 291,500 bales, with upland exports of 279,200 bales going mainly to China, Turkey, Mexico, Vietnam and Thailand.

Meanwhile, U.S. crop conditions slipped to the lowest of the season during the week ended Aug. 11, with good-to-excellent cotton down two percentage points to 45 percent, fair down two points to 32 percent and poor to very poor up four points to 25 percent.

The DTN cotton condition index dropped to 75 from 106 a week earlier and 86 a year ago. In Texas, 36 percent of the crop was rated poor to very poor, up five points on the week.