By Duane Howell
For A-J Media

U.S. current-crop cotton futures have edged higher a second week, with spot March holding onto a small gain following a bullish outside-range reversal coming out of a three-day holiday weekend.

March gained 19 points for the week ended Thursday to close at 62.09 cents. It set the range for the week on Tuesday when it rallied from a five-session low at 61.30 to a 10-session high at 62.93 cents and finished with a 106-point gain to 62.47 cents, above the prior seven daily highs.

May also rose 19 points for the week to 62.46 cents and July gained 21 points to 62.85 cents. The July-December intercrop spread inverted to a 49-point July premium, with December falling 35 points to 62.36 cents.

Ongoing concerns about tight availability of higher quality cottons contributed to driving March to its biggest one-day gain since Nov. 25.

Cash grower-to-business sales declined to 63,033 bales from 79,841 bales on The Seam. Prices averaged 57.41 cents, up from 56.81 cents, reflecting gains to 10.30 cents from 9.35 cents in premiums over loan repayment rates. Daily average prices ranged from 54.29 to 58.07 cents.

Uncertainties regarding ChinaΆs cotton reserves policy have contributed to strong macroeconomic headwinds, keeping a lid on rallies.

Widespread reports have indicated that China will make a concerted effort this year to reduce its massive stockpile. Reserve auctions last year resulted in sales of less than 64,000 metric tons (293,900 bales), much less than a target of a million tons (4.59 million bales).

Earlier, Cotton Outlook reported in a monthly review that conjecture has abounded that the Chinese New Year will be followed by a resumption of state reserve sales, limiting any tendency for interior asking rates to rise as a result of the short crop and tight availability of import quota.

The Chinese New Year, based on the lunar calendar, always falls between late January and mid-February and this year will be Feb. 8.

In a related development, traders took note of a report that ChinaΆs cotton imports fell to the lowest in at least nine years in calendar year 2015, according to Reuters calculations based on customs figures.

Imports by the worldΆs top cotton consumer have slowed as the gap between domestic and international prices has narrowed and after Beijing reduced available import quotas to boost consumption of domestic supplies.

China imported 188,200 metric tons (864,387 statistical 480-pound bales) in December, down 28.8 percent from a year earlier, said trade website CNncotton.com, citing customs data.

This brought imports for the 2015 calendar year to 1.48 million tons (6.798 million bales), according to Reuters calculations. The previous low was 1.53 million tons (7.028 million bales) in 2008, according to customs data gathered by Reuters since 2006.

The industry is forecasting a further decline in imports for 2016 after domestic prices fell to a new low earlier this month on expectations that Beijing could sell some of its massive stockpile at a discount, Reuters reported.

Other calculations put imports for the first five months of the cotton marketing year at 1.997 million bales, down 43.2 percent from 3.514 million in the corresponding period last season and 68.9 percent from 6.43 million in August-December 2013.

The USDA has projected ChinaΆs 2015-16 marketing year imports at 5.5 million bales, down 33.6 percent from 8.28 million bales in 2014-15 and down 61 percent from 14.12 million bales in 2013-14.

Those would be ChinaΆs smallest marketing-year imports since 2002-03 when the country shipped in 3.13 million bales.

Other importing countries are moving into the void, with 2015-16 global imports projected at 36.07 million bales, up a modest 360,000 bales, or 1 percent, from last season.

Bangladesh is expected to replace China as the worldΆs leading cotton importer this season on imports of 5.75 million bales, up from 5.4 million last season. Vietnam is in third place on 5.2 million bales, up from 4.3 million in 2014-15.

On the U.S. crop scene, upland classing slowed to 331,417 running bales during the week ended Jan. 14 from 402,652 RB the prior week. The seasonΆs total was 11.233 million RB, down from 14.393 million a year ago.

Cotton tenderable on U.S. futures contracts totaled 50.1 percent for the week, down from 54.4 percent the previous week, and 55.8 percent for the season, down from 69.5 percent a year ago. The USDA had classed 93 percent of the upland production estimate.

Looking ahead, Informa Economics, Memphis-based analytical firm, has forecast U.S. cotton plantings at 9.369 million acres, sources said, up 9.2 percent from last yearΆs 8.581 million acres.

A Cotton Grower magazine survey of producers earlier indicated plans to increase cotton acres by 5.9 percent to 9.085 million, while a poll of mostly analysts and traders by Reuters produced a median estimate of 9.7 million acres, up 13 percent.

The market moved to TuesdayΆs high following a report showing a sizable increase in fund shorts, and short-covering was thought to have helped to trigger buy-stops and fresh buying as open interest rose.

Hedge funds and index funds sold a combined 23,386 lots during the week ended Jan. 12 to cut their net long futures-options position to 77,019 lots. Commercials bought 26,757 lots to slash their net shorts to 76,383, smallest since Sept. 29. Traders with nonreportable positions sold 3,372 lots to flip to net short 636 lots from net long 2,736 lots.

Trend-following funds reduced their net longs by 20,037 lots to 16,479 — also the smallest since Sept. 29 — and index funds cut theirs by 3,349 lots to 60,540. Combined, they added 14,752 shorts and liquidated 8,654 longs.

In futures only, noncommercials cut their net longs by 9.4 points to 19.8 percent of the then-declining open interest. They sold 17,994 lots, adding 11,767 shorts and liquidating 6,227 longs to drop their net longs to 36,007.