By Duane Howell

Aggressive short-covering amid heavy spread activity, a batch of fresh export demand and mill buying snapped a nine-session losing streak and drove cotton futures to a daily limit gain early last week.

Spot July jumped to closing gains totaling a combined 520 points Monday and Tuesday, breaking the longest skid in three years, and gave back some of the advance on Wednesday as export inquiries turned quiet on the higher prices and traders pocketed some profits.

Then July rallied to close up 474 points for the week ended Thursday to 84.87 cents, its highest finish since May 20, the day it began the longest losing streak since June 2010. It settled just off the high of the weekΆs range from 79.30-84.98 cents

December gained 256 points to close at 85.39 cents and finish a few ticks back above its 50-day moving average.

U.S. export sales leaped to a combined 323,600 running bales for delivery this season and next during the week ended May 30, more than double the previous weekΆs 158,400 bales.

Old-crop sales rose to 185,200 bales from 119,800 bales, with upland sales of 184,200 bales up 57 percent from the previous week and 80 percent from the prior four-week average. New-crop sales climbed to 138,400 bales from 38,600 bales the week before.

Shipments remained robust at 307,100 running bales, well above the weekly average of roughly 207,000 now needed to reach the estimate.

Commitments for 2012-13 climbed to 13.19 million bales, widening the lead over year-ago sales to 924,000 bales or to 8 percent. Outstanding sales plus shipments were 103 percent of the USDA estimate, against 108 percent a year ago.

Shipments for the season of 11.196 million bales topped year-ago exports by 1.647 million bales or by 17 percent and were 87 percent of the forecast. A year ago, shipments were 84 percent of final exports.

Commitments for 2013-14 reached 1.823 million bales, up 153,000 bales from forward bookings a year ago and 16 percent of the forecast.

On the crop scene, a broad band of thunderstorms brought widespread beneficial rains to the Texas High Plains at midweek but also were accompanied by strong winds, blowing dust and pockets of damaging hail. A key dryland area south of Lubbock — Lamesa — got only 0.09 of an inch.

A Lynn County producer said some of his irrigated cotton hit by blowing sand looked black from the road — as if it were dead — but on closer field inspection appeared that it “will be OK.”

However, he pointed out that “sand burn” on young cotton is particularly hard to assess right after a big windstorm. Stands that initially have seemed likely to survive can be weakened or lost by damaged plants dying over time, he said.

Some industry estimates indicated 75 percent to 80-plus percent of the crop may have been planted in the Lubbock territory, including a large dry-planted acreage, with emergence on less than half the planted area.

U.S. planting advanced an impressive 23 percentage points to 82 percent complete during the week ended June 2, five points behind last year but just a point behind the five-year average, USDA reported.

Progress jumped 29 points to 78 percent planted in Texas and 15 points to 83 percent complete in Georgia, a bit above the state averages.

Cotton in Texas was rated 6 percent excellent, 22 percent good, 46 percent fair, 19 percent poor and 7 percent very poor. Across the Cotton Belt, squaring totaled 4 percent, compared with 11 percent last year and 7 percent on average.

Looking at world prices, the International Cotton Advisory Committee says values as measured by the Cotlook A Index fell to around 90 cents as the end of May approached, while the China Cotton Index fell to 19,350 yuan per metric ton or 142 cents per pound.

Assuming the current Chinese reserve policy continues as announced, ICAC said in a report, the index now is projected to average 115 cents in 2013-14. This is down 7 cents from the ICAC projection a month ago but up from 88 cents still foreseen for 2012-13.

The ICAC raised its world 2013-14 production forecast by 2.21 million bales on the month to 115.24 million and nudged its consumption estimate up 270,000 bales to 111.65 million. World trade rose by 640,000 bales to 41.52 million and ending stocks by 1.79 million bales to 85.61 million.

Back on the U.S. scene, this is a rather frightening time for the cotton industry in the Delta, says John Bondurant, Memphis-based trader and Delta producer.

“I still canΆt get over how little cotton is around,” he said after driving to his Arkansas farm. “On my 40-mile drive over I saw two fields of cotton. Fields that havenΆt been in anything but cotton for over 50 years are now in wheat and corn.”

The Delta is losing its infrastructure for cotton, mainly by losing cotton pickers, Bondurant said.

“A new on-board, module-building picker costs around $650,000 and only picks one crop,” he noted. “Many farmers have sold their cotton pickers. I doubt they will want to get back into cotton unless the profit potential is staggering. How do you make a cotton picker pay off when you only use it one or two years out of five?”

December 2014 cotton futures are lower in price than December 2013, he observed, while December 2014 prices for corn, soybeans and wheat are $100 to $250 more profitable than cotton for the 2014 season.

Meanwhile, trend-following funds sold 10,890 lots in futures-options to slash their net longs by 17.9 percent to 49,870 lots during the week ended May 28.

Index funds sold a net 2,787 lots to cut their net longs to 71,835 lots, while small traders sold 5,136 lots to reduce theirs to 3,371 lots. Commercials bought 18,814 lots, covering 12,425 shorts and adding 6,389 longs to chop their net shorts to 124,627 lots.

DUANE HOWELL is retired farm editor of the Avalanche-Journal. He can be reached at duane.howell@sbcglobal.net.