By Duane Howell

Casino-like price action whipsawed cotton futures over a 751-point trading range last week as the spot delivery spanned nearly 7 cents in a single session.

Benchmark May reversed on Monday from a double top at the time of 93.75 cents to 89.84 cents — below the prior two weekly lows — after China announced a cut in the selling price of its government-owned stockpile.

Then it exploded to a 400-point limit gain on Tuesday after USDA confirmed — generally expected in the cotton trade — that ginning figures were below the last official production estimate.

May extended the advance on Wednesday, soaring to a new 25-month high at 97.35 cents, and then collapsed 6.52 cents in the widest one-day trading range since July 2011.

The market finished on a relatively calm note on Thursday, closing with modest gains from a week earlier of 38 points to 92.56 cents in May and 60 points to 92.37 cents in July. December slipped 53 points to 79.45 cents, trading from 78.78 to 80.50 cents.

May triggered a series of buy stops, especially when it broke through the 2013 high of 93.93 cents posted in mid-March. The midweek reversal on huge volume of 56,095 lots, largest since June 2013, smacked technically of a “blow-off top.” However, traders were cautious, considering the volatile price action and tightening old-crop supplies.

Constructive U.S. weekly export sales offered support, rising to 79,000 running bales for the week ended March 20 from 54,800 RB the previous week. Shipments slowed to 278,400 RB from 345,000 the week before but remained above the weekly average needed to reach the estimate.

The ginning data appeared to have ignited the price explosion on Tuesday, even though the USDA report was in line with most expectations and not a surprise to those who follow the figures.

U.S. gins processed 12.867 million 480-pound bales of 2013-crop cotton, down 320,000 bales from USDAΆs last crop estimate. The new figures are expected to be incorporated into the April 9 supply-demand report and result in smaller, already tight ending stocks in the worldΆs largest cotton exporter.

Included in the ginning data were 20,150 bales that ginners estimated would be processed after the March survey. There were 609 active gins for the 2013 crop year, down from 671 the previous season.

Upland ginning totaled 12.234 million statistical bales, down from the last estimate of 12.551 million. In running bales, the all-cotton total was 12.522 million, including 11.912 million of upland. Bale weights averaged 493.2 pounds, against 492.9 pounds in 2012 and 492.8 pounds in 2011.

Texas gins turned out 4.19 million statistical upland bales, down from the estimate of 4.3 million. Based on average Texas bale weights of 492 pounds, ginning on the High Plains of 2,532,350 RB translated into a crop of 2.596 million statistical bales, down 74,000 bales from the crop forecast and from 2.947 million bales harvested last season.

The latest U.S. crop estimate combined with beginning stocks of 3.9 million bales had yielded a projected 2013-14 supply of 17.1 million bales, 17 percent below a year ago and the lowest in nearly three decades.

And with demand for U.S. cotton exceeding production, ending stocks earlier this month already had been forecast to fall to 2.8 million bales, 28 percent below last seasonΆs carryout and the smallest since 2010-11.

Looking ahead, USDAΆs National Agricultural Statistics Service will issue its long-anticipated U.S. prospective plantings report on Monday.

Cotton plantings are forecast by Informa Economics at 10.995 million acres, up 5.7 percent from 10.407 million acres in 2013, sources said.

The Memphis-based analytical firmΆs forecast compares with 11.26 million acres reported in the National Cotton CouncilΆs early intentions survey and 11.5 million acres projected at USDAΆs Outlook Forum.

Informa estimated upland plantings at 10.8 million acres, up from 10.206 million acres last year, and the Pima area at 195,000 acres, against 201,000 in 2013. It projected Texas plantings to expand 500,000 acres to 6.3 million.

Traders had expected China to announce a modest cut in its new selling price accompanied by an import arrangement under which qualifying mills could get a one-ton allocation under a sliding tariff system for every four tons of cotton purchased from the government stockpile.

China made no mention of an import quota in its initial announcement that the new base selling price will be 17,250 yuan per metric ton, or 127.33 cents per pound, at a prevailing bank exchange rate, down 4.2 percent from the current 18,000 yuan, or 132.87 cents.

The new floor price for standard quality cotton will take effect April 1. The announcement was viewed as an effort to boost the sales of government-owned cotton and reduce imports.

ChinaΆs top agriculture bank was reported earlier to have urged Beijing to step up sales of its state grain and cotton reserves. Beijing plans to complete its 2013-14 cotton stockpiling program at the end of March and shift to a direct subsidy plan for the 2014-15 marketing year.

The USDA has projected ChinaΆs overall ending stocks this season at 57.81 million bales, almost 60 percent of record high world stocks of 96.75 million bales. Stocks in the rest of the world outside China are expected to edge up 140,000 bales from a year ago to 38.94 million.

China for the last three seasons has absorbed most of the surplus production in the rest of the world, paying premium prices though its stockpiling program, driving big imports of cheaper foreign growths and supporting global prices even as supplies outstripped demand.

Meanwhile, trend-following funds bought a net 3,601 lots in futures-options combined during the week ended March 18 to boost their net long position to 54,902 lots.

This followed aggressive buying the previous week and lifted their net longs to the largest since Aug. 27. The buildup contributed to long liquidation when the market turned down during MondayΆs selloff.