By Duane Howell

Persistent liquidation and rolling of hefty fund and speculator long holdings on weak technical signals chewed through sporadic mill buying last week to maintain pressure on cotton futures.

Spot July lost 165 points for the holiday-shortened trading week ended Thursday to settle at 80.13 cents, its eighth consecutive lower close and its lowest finish since Jan. 18. With one session left in May, July was down 734 points or 8.4 percent from its close April 30.

The spot delivery posted a low of 79.87 cents, just above a 50 percent retracement (79.40) of the rally from last summerΆs low of 64.60 on the December 2012 contract to the March 15 high on July of 94.20 cents.

December shed 75 points to close at 82.83 cents, its lowest finish since Feb. 26. It fell to a 42-point settlement discount to March from a 29-point premium week ago, a bearish move in the spread of 71 points.

Certified stocks continued to grow ahead of first notice day for July deliveries on June 24, rising 2,824 bales to 512,672, with 15,552 bales awaiting review for a possible total of 528,224 bales. Open interest fell 6,708 lots to 183,754, with JulyΆs down 14,532 lots to 107,011.

World values as measured by the Cotlook A Index dropped 190 points for the week to 89.60 cents as of Thursday morning, reflecting a premium over the prior dayΆs July futures settlement of 8.90 cents.

Many mills appeared waiting for prices to stabilize before stepping in to buy, analysts said.

On the crop scene, U.S. planting advanced 20 percentage points — fastest pace of the season — to 59 percent complete during the week ended May 26, according data reported by USDA.

This trailed 76 percent planted a year ago and the five-year average of 69 percent. Progress exceeded the average in only four states — by five points at 87 percent planted in Alabama, six points at 99 percent in Arizona and by a point in both California and Missouri at 98 percent and 93 percent, respectively.

Planting reached 49 percent complete in Texas and 68 percent in Georgia, behind the state averages by 11 points and a point, respectively. Squaring in Texas at 4 percent was five points behind average.

Drying winds caused problems with stand establishment and sand burn on seedling cotton on the Texas High Plains. A big block of dryland acres still lacked adequate moisture to get stands established.

Topsoil moisture was short to very short in 97 percent of the northern High Plains and 96 percent in the southern district.

Planting lagged the average by the largest margins of 48 points at 36 percent seeded in Mississippi, 34 points at 37 percent complete in Tennessee and 26 points at 56 percent done in South Carolina.

Some around-the-clock planting took place in the Delta for a brief time before heavy rains again halted operations. Low-lying areas were expected to remain under water for days because of rising rivers.

Flooded fields originally slated for cotton may have to be switched to soybeans unless the water recedes and soils firm before the cotton planting window closes the first week in June.

Separately, an annual USDA crop quality review on U.S. cotton classed through May 2 showed 61 percent of the 2012-13 upland output met requirements for delivery on futures contracts, lowest since 2002.

Tenderable cotton in the previous five years totaled 70.2 percent in 2011, 67.2 percent in 2010, 67.6 percent in 2009, 63.1 percent in 2008 and 69.7 percent in 2007.

Color grade 41 was the predominant 2012-13 color at 35 percent, compared with color grade 31, also 35 percent, the previous year. All white color grades accounted for 92 percent, up from 91 percent in 2011, while light spots comprised 7 percent, down from 8 percent. Spotted, tinged, yellow stained and below grades made up about 1 percent.

Leaf grade 3 topped that category at 41 percent, against 40 percent a year earlier. Leaf grades 1 and 2 comprised the next highest percentages at 26 percent, against 31 percent a year ago, while leaf 4 rose to 25 percent from 22 percent and leaf 5 dipped to 7 percent from 6 percent.

Staple lengths averaged 35.7 thirty-seconds of an inch, up slightly from 35.5 a year ago, with 36 predominant at 32 percent, up from 26 percent in 2011. Staples 32 and shorter comprised 3 percent; staple 33, 4 percent; staple 34, 10 percent; staple 35, 23 percent; staple 37, also 23 percent; staple 38, 4 percent; and staple 39 and longer, 2 percent.

Micronaire averaged 4.5, same as last year, with mike readings of 2.9 and lower at 1 percent; 3.0-3.2, 2 percent; 3.3-3.4, also 2 percent; 3.5-3.6, 3 percent; 3.7-4.2, 17 percent; 4.3-4.9, 55 percent; and 5.0 and higher, 20 percent. In the 2011 crop, 4.3-4.9 was 60 percent.

Fiber strength averaged 29.9 grams per tex, down slightly from 30.0 a year ago, with 25 at 1 percent; 26-27, 11 percent; 28-29, 31 percent; 30-31, 35 percent; 32-33, 17 percent; and 34 and higher, 5 percent.

Meanwhile, trend-following funds, index funds and small traders reduced their total net longs by 3,732 lots or 2.5 percent to 143,440 in futures-options combined during the week ended May 21, according to Commodity Futures Trading Commission data.

Trend-following funds covered more shorts (1,923 lots) than they liquidated longs (1,307 lots) to nudge their net longs up 616 lots to 60,761, while index funds sold a net 2,654 lots to reduce theirs to 74,172 lots and traders with non-reportable positions sold 1,694 lots to cut theirs to 8,507 lots.

Commercials added 11,207 longs and 7,475 shorts to trim their net shorts by 3.2 percentage points to 54 percent of the futures-options open interest. In futures only, non-commercials increased their net longs by a percentage point to 33.6 percent of the open interest.

The eight-day losing streak started a day earlier.