Cotton futures have rebounded from the prior weekΆs setback and bearishly construed USDA supply-demand estimates to finish ahead.

Benchmark December advanced 1,043 points during the week ended Thursday to close at 106.95 cents, in the upper quarter of its 1,185-point range from 96.15 cents to 108 cents. Its midweek close at 107.82 cents was its highest settlement since July 13.

The cotton market gave back a relatively small portion of the advance amid broad losses in commodities and a rout in global equities as the period ended on heightened worries about the U.S. economy and dim prospects for a quick fix for the euro zone debt crisis.

December cotton made four limit moves in five sessions — three up and one down. Technical momentum drove December to closes above its nine-day and 18-day moving averages early in the period and above the 40-day average at midweek for the first time since June 14.

The key contract, which accounted for 65 percent of the total open interest, rallied up to 1,428 points from the prior weekΆs retest low. Technically, analysts said, a close over 109 cents would be required to extend the rally.

Cash grower-to-business sales on The Seam totaled 606 bales of new-crop cotton, against none the prior week. Prices averaged 95.82 cents, reflecting premiums over loan redemption rates of 44.83 cents. Old-crop business-to-business sales of 2,438 bales brought prices averaging 94.05 cents and premiums of 41.24 cents.

World values as measured by the Cotlook A Index advanced at a slower pace than futures, gaining 700 points from a week earlier to 117.20 cents Thursday morning. This narrowed the premium to the prior-day December futures settlement by 302 points to 9.38 cents.

An apparent big crop year switch in a rather confusing USDA report showed net U.S. all-cotton export sales totaling a combined 51,300 running bales for this season and next during the week ended Aug. 11.

Net cancellations of 336,800 bales for 2011-12 were the largest veteran analysts could recall for this early in the season and net forward sales of 388,100 bales for 2012-13 were unexpectedly large.

Upland cancellations of 419,100 bales for this season overwhelmed gross sales of 82,100 bales. China and Turkey canceled a net 337,700 bales and 13,200 bales for 2011-12, respectively, and booked a net 374,000 bales and 13,200 bales for 2012-13.

All-cotton shipments for the first full reporting week of the marketing year at a mere 83,800 bales nudged exports for the season to 166,900 bales, down 252,600 bales from a year ago. Shipments need to average roughly 232,500 running bales a week to reach the USDA forecast.

Commitments for 2011-12 declined to 6.746 million running bales, including rollovers of 827,800 bales of unshipped sales from 2010-11. This is up 564,000 bales from sales a year ago and is around 57 percent of USDAΆs forecast. Year-ago sales were about 45 percent of final exports.

On the crop scene, tremendous variability — even within individual fields — in irrigated cotton on the Texas High Plains has compounded the uncertain U.S. supply outlook. The High Plains, a prime source of exportable supplies, accounted for 85 percent of the irrigated cotton acreage in Texas last year.

Many fields have reached or approached cutout much earlier than normal. This has raised questions about how well USDAΆs irrigated cotton yield projections account for abnormally wide variability in such factors as crop maturity.

John Robinson, extension economist in cotton marketing at Texas A&M, says that historical data basically show that during short crop years — such as the drought of the late 1990s — the initial U.S. production forecast varied from 2 percent to 10 percent to the final tally.

During some of the more recent big crop years, however, big crops got bigger and the initial USDA forecast varied from 1.5 percent to 15 percent. The average revision of the initial August forecast is 8 percent, which on the current estimate would be about 1.3 million bales.

“If USDAΆs forecasting models donΆt account for the physiological stage of the plant, the accumulation of heat units and the remaining days until maturity, then I could see the real possibility of overestimating yields of irrigated cotton in West Texas,” he says in a newsletter.

Also, he added, crops reportedly are later than normal in the Delta and Georgia. Those crops will need clear, dry weather in October for maturation. This always is an issue but is more so this year, he said.

The latest crop progress data highlighted the early harvest in Texas. Ten percent of the Texas was crop off the stalk as of Aug. 14, against none last year and 1 percent on average.

Boll setting across the state advanced 11 percentage points for the week to 90 percent, 14 points ahead of average.

On the international scene, reports of excessive rains in Pakistan got the attention. Devastating floods decimated the Pakistani crop last year, and the market is sensitive to crop news from the worldΆs fourth-largest cotton producer.

Preliminary estimates indicated losses may have totaled around 300,000 to 400,000 bales, trade sources said. The USDA pegged the crop earlier this month at 10.3 million 480-pound bales, up from 9.6 million last season.