Scant Asian mill demand and weak technical factors drove some weather bulls to the exits in mostly light trading in cotton futures last week.

The market posted losses for the week ended Thursday of 2,359 points to 136.20 cents in July, 749 points to 116.20 cents in October, 507 points to 113.52 cents in December and 173 points to 107.89 cents in March.

July, trading without limits because it was in its delivery period, collapsed 1,920 points on its final trading day and expired 2,000 points over thinly traded October.

Benchmark December lost ground five sessions in a row, its longest losing streak since December 2009, before eking out a 10-point gain after printing its lowest price, 112.26 cents, since Jan. 31. It closed two straight sessions near the May low of 113.76 cents, a support area.

Concerns that a new interest rate hike announced by China could exacerbate slowing mill demand in the world’s largest raw cotton user and largest buyer of U.S. cotton weighed on the market.

A slowdown in manufacturing growth attributed to inflation-fighting curbs on credit and China’s decision to halve import tariffs on some cotton cloth products have contributed to low mill demand for the natural fiber, reports indicated.

The USDA’s updated supply-demand estimates on Tuesday are expected to reflect cuts in 2010-11 exports and probably in domestic mill use. With the old-crop supply now determined, demand cuts would boost tight ending stocks for 2010-11 and raise beginning stocks for 2011-12.

Globally, the International Cotton Advisory Committee cut its mill use estimates by 2 million bales from a month ago for each 2010-11 and 2011-12 to 113 million and 116 million, respectively. Its production forecasts now are a million bales and 10 million bales, respectively, above the consumption estimates.

Traders continued to keep an eye on crop conditions in the West Texas Plains, which have been overshadowed mainly by global demand issues but also by prospects for record world production.

Limited and declining well capacities under historic drought and record heat have presented big challenges for irrigated cotton on the Texas High Plains. Much of the watered cotton has “perked up” and most square sets have been high, reports have indicated.

A recent respite from record heat, strong desiccating winds and relative humidity below 10 percent or even 5 percent fostered improvement.

But many producers south of Lubbock have had to sharply curtail the acreage they can irrigate. Some have cut their irrigated area in half. The remainder of what they normally would irrigate now must survive under dryland conditions.

And some growers in the north had to switch water from more drought-tolerant cotton to corn. Cotton’s peak water use period is still ahead. Its water demands increase with the onset of blooming and reach a peak at peak bloom. Some producers are trying to save water for the bloom period.

Overall, irrigated yields appear likely to fall below those of recent years, crop specialists say. Some drip-irrigated fields with high yield histories have been abandoned because lack of planting rains prevented crop establishment for plant roots to reach the moisture zone of the subsurface drip lines.

Relentless around-the-clock pumping operations have wormed out many irrigation pumps. Growers have installed a lot of new pumps, performed pivot maintenance and replaced nozzles to maximize irrigation efficiency.

Research has indicated cotton and sorghum require a minimum of approximately 13 inches of water from stored soil moisture, rainfall and/or irrigation to achieve a harvestable yield, says Dana Porter, extension agricultural engineer at Lubbock.

“Full water demand in an ‘average’ year is approximately 27 inches and 24 inches for cotton and sorghum, respectively,” she said in an overview on crop water demand in Focus on South Plains Agriculture. “Water less than 75 percent of this value or 21 inches for cotton would be expected to result in yield loss.”

Greater water deficit of course will result in larger yield loss, the engineer pointed out, and drought stress at critical growth stages can have more pronounced effects on yield and/or quality.

Growers have abandoned the huge preponderance of dryland acreage, which last year amounted to 53 percent of the planted cotton area on the High Plains.

Irrigated cotton on the High Plains last year constituted 85 percent of the statewide irrigated plantings. Dryland acreage totaled 63 percent of the 2010 Texas cotton plantings and 84 percent of the cotton area in the Rolling Plains, which adjoins the High Plains east of the Caprock.

With historically high losses from the planted area looming in Texas, the U.S. abandonment could jump to around 25 percent, says John Robinson, state extension economist in cotton marketing.

“I am not sure what yield to expect,” he said, noting that yields don’t correlate well with abandonment and have been trending higher owing to improved technology. Yields averaged 812 pounds per acre in 2010-11.

Production could range anywhere from 14 million to 17 million bales, he said, depending upon the eventual combination of abandonment and yield.

Robinson averaged yields from years with high abandonment, which worked out to 730 pounds per acre, and estimated harvested acreage at 10.29 million, down from plantings of 17.73 million acres. This would put production at 15.66 million bales, down from 18.1 million in 2010-11.

The USDA last month projected production at 17 million bales off an analytically derived yield of 800 pounds. It forecast abandonment of 18.9 percent from the March prospective plantings.

Robinson cut the 2011-12 export estimate a million bales to 12 million and left mill use at 3.8 million bales and beginning stocks at 2.25 million bales. He projected ending stocks of 2.16 million bales, down from USDA’s 2.5 million. All this yielded a stocks-to-use ratio of 13.6 percent, against USDA’s 14.9 percent and 12 percent in 2010-11.