Improved technical action, mill buying, short-covering and perhaps some new fund buys have lifted cotton futures to new rally highs.

Benchmark December gained 66 points for the week ended Thursday to close at 66.58 cents after hitting a high of 67.72 cents, its highest intraday price since July 23.

Technically, December achieved a 25 percent retracement (67.70) of the 22.72-cent move from the May 8 high to the contract low of 62.02 cents on Aug. 1 and stalled shy of the 38.2 percent retracement (68.09) of the 15.88-cent fall from the June 23 high to the August low.

December remained on track to post a monthly gain, having rallied as much as 9.2 percent from the Aug. 1 low and posted a closing gain through Thursday of 371 points or 5.9 percent from its July 31 settlement.

Cash grower-to-business sales, which dried up when prices fell at the end of the period, rose to 2,342 bales from 1,340 bales the previous week. Prices edged up 61 points to average 65.92 cents, reflecting a 66-point gain to 10.22 cents in premiums over loan repayment rates.

Weather forecasts favorable for cotton may have contributed to negative sentiment in an overbought market as December posted its largest daily loss — 88 points — on Thursday in 13 sessions.

The forecasts included scattered showers and thunderstorms capable of producing heavy rainfall Thursday on the Texas High Plains, projected to produce 26 percent of the nationΆs upland crop, and a 30 percent chance for additional rain Friday.

Rain would help cotton to fill out bolls and carry more to maturity, but lack of adequate moisture during the past month or so on sizable dryland acres also already has irretrievably cut some yield prospects.

Skepticism has persisted that the High Plains crop can achieve the 4.4 million bales estimated by USDA on the basis of conditions around Aug. 1, up 80 percent from last seasonΆs 2.446 million bales.

The market shrugged off larger-than-expected U.S. export sales for shipment this season of 250,600 running bales during the week ended Aug. 21, up from 158,200 bales the previous week.

Commitments climbed to 5.022 million bales, widening the lead over bookings a year ago to 1.45 million bales and reaching about 48 percent of the export forecast. A year ago, commitments were about 37 percent of final 2013-14 exports.

Shipments eased to 100,200 bales from 109,900 bales the week before. Exports for the season of 309,200 bales trailed year-ago exports of 774,300 bales. Tight near-term supplies have hampered shipments.

To achieve the USDA estimate, shipments need to average roughly 205,500 running bales a week, while sales averaging around 109,300 bales would match the export forecast.

Looking ahead, cotton producers have continued to voice concerns about USDAΆs Risk Management Agency, saying it will be unable to implement for the 2015 crop the actual production history (APH) yield adjustment provision contained in the 2014 farm law.

The National Cotton Council has applauded the RMA for a timely announcement that the Stacked Income Protection Plan (STAX) will be available to upland cotton producers through the federal crop insurance program beginning with the 2015 crop.

But the councilΆs American Cotton Producers unit also has urged the NCC to continue its efforts to have the APH yield adjustment provision implemented for the 2015 crop.

In its announcement, USDA said it wanted to make as much information available now to assist with farmersΆ risk management planning. It said STAX is one of several new risk management options created by the 2014 farm law that will help protect farmers from events beyond their control.

But on its webpage the RMA says the APH adjustment “will require significant modifications to RMAΆs business support systems and will require RMA staff to evaluate the impact this change will have on program actuarial soundness and the existing premium rating methodology.”

A provision in the 2014 Farm Bill allows producers to “exclude any year from their insurable production (APH) if the countyΆs yield per planted acre for the crop in that year is at least 50 percent below the previous 10-year average of the yield per planted acre for the crop in the county. This also applies to contiguous counties and allows for the separation of irrigated and non-irrigated acres.”

The provision is particularly important in the Southwest where three straight years of drought have drastically impacted yield histories and insurance coverage levels.

With cotton producers now ineligible for most other programs, insurance coverage will be crucial this fall and winter when producers seek financing for the 2015 crop, especially if prices remain low. The December 2015 contract closed Thursday at 70.71 cents, up 48 points from a week earlier and 340 points from its Aug. 1 low.

On the U.S. crop scene, conditions improved a bit during the week ended Sunday, USDA reported, with good to excellent up a percentage point to 51 percent and fair down a point to 33 percent.

A year ago, good to excellent totaled 47 percent and fair also was 33 percent. The DTN cotton conditions index edged up to 126 from the seasonΆs low a week ago of 125 and was up from 87 a year ago.

Boll setting at 90 percent was up from 89 percent a year ago but down from 93 percent for the five-year average, while boll opening at 19 percent was up from 10 percent and 18 percent, respectively.

On the international scene, a survey by the China Cotton Association and Xinjiang cooperatives has indicated cotton plantings in prior years have been understated and that the national area for 2014 is down 9.4 percent from last year.

Yet the crop is estimated at 6.73 million metric tons (30.91 million 480-pound bales), up from USDAΆs latest forecast of 29.5 million bales.