Short-covering has boosted cotton futures from near five-year lows amid some profit-taking ahead of U.S. weekly export sales data and updated supply-demand forecasts.

Benchmark December gained 115 points during the week ended Thursday to close at 64.02 cents, up from its contract low of 62.02 cents hit on Aug. 1, the first day of the 2014-15 marketing year.

December posted four consecutive higher lows as its open interest coming into ThursdayΆs session fell 2,491 lots from a week earlier to 119,800 lots, indicating short-covering figured prominently in the rally.

Trading volumes declined as the week progressed and many traders moved to the sidelines to await USDAΆs widely anticipated crop estimates on Tuesday. Volumes fell to a two-day average of 12,900 lots at the end of the period, against a daily average for the year of about 24,000 lots.

December closed at midweek just above its nine-day moving average for the first time since a one-day stand there on June 23 but settled the next day back below that declining mark. At the contract low, December had plunged 2,272 points, or 26.8 percent, from its May 8 high.

Scale-down mill buying offered support. Talk circulated that producers may balk at selling as prices near the adjusted world price level. The USDA announced the AWP for the week ending Aug. 14 at 52.61 cents, just 61 points above the base loan rate.

Old-crop supplies are expected to remain tight until the late-developing new crop begins to move in volume, expected in November.

First notice day for December deliveries is Nov. 21.

Supportive export sales came in about as expected for the week ended July 31. Net new-crop all-cotton sales of 252,300 running bales plus a carryover of 579,000 bales of unshipped 2003-14 sales boosted 2014-15 commitments to 4.434 million, already 45 percent of the USDA forecast.

Shipments of 147,400 running bales brought exports for 2013-14 to 10.229 million RB, or about 10.54 million statistical bales, slightly above the USDA estimate of 10.5 million but down about 19 percent from the prior seasonΆs 13.03 million.

Net old-crop commitments eased 2,200 running bales to final 2013-14 sales of 10.808 million, about 6 percent above the USDA shipments estimate. China was the leading buyer, purchasing 2.791 million RB or about 26 percent.

Private estimates of U.S. 2014-15 production have ranged all the way from around 16 million bales to about 18 million. The USDA last month projected 16.5 million bales, up from 12.91 million bales last season.

Estimates have been mostly above last monthΆs USDA forecast, but Informa Economics, a Memphis-based analytical firm, has projected 16.1 million bales. The USDAΆs August crop estimate will be its first survey-based forecast of the season.

U.S. crop conditions slipped slightly during the week ended Aug. 3, USDA reported, with good to excellent down a percentage point to 53 percent and poor to very poor up a point to 14 percent.

A year ago, good to excellent totaled 45 percent and poor to very poor 21 percent. The DTN cotton conditions index fell to 133 from 135 a week earlier and was up from 106 last year.

Boll setting at 68 percent moved two points ahead of the five-year average and squaring at 95 percent was even with average.

Cotton in some dryland areas of the Texas High Plains has begun blooming at or near the tops of canopies, indicative of moisture-stressed plants. Producers have shredded some fields that had failed because of excessive weed populations and had been turned over for insurance claims.

Irrigated cotton advanced and generated optimism, with an open fall needed for optimum yields as well as some supplemental August rainfall. Much of the irrigated area has received more rain than key dryland areas.

Dryland acreage accounted for 62 percent of the 3.751 million acres planted to cotton on the High Plains last year, against 57 percent of 4.179 million acres the year before. Ten years earlier, the irrigated portion comprised 54 percent of 3.561 million planted acres.

Globally, with polyester and cotton prices converging, cotton consumption is forecast to increase 5 percent from last season to 112.53 million bales, up from 110.87 million bales projected last month.

This — converting to 480-pound bales from metric tons — is among the latest 2014-15 supply-demand projections by the International Cotton Advisory Committee.

After international cotton prices spiked in 2010-11, many spinners decreased the share of cotton in yarn in favor of greater use of polyester. At the start of 2013, the gap between cotton and polyester prices widened. Polyester prices remained fairly stable at 74 to 76 cents a pound for most of 2013 into 2014 until sliding to 65 cents in April.

During the same period, international cotton prices climbed, reaching 99 cents at the peak. However, the situation changed significantly last month, with the Cotlook A Index of world values falling to 80 cents and polyester prices climbing back to around 73 cents.

And cotton prices in China have fallen from around 141 cents during most of 2013-14 to about 126 cents in the last few weeks.

World production is forecast at 117.72 million bales, up from 116.52 million estimated last month but down from 120.13 million in 2013-14. Ending stocks are projected at 99.62 million bales, up from 98.43 million a month ago and 94.61 million last season.

But with demand expected to improve as cotton gains competitive ground against synthetics, ICAC raised its forecast of average 2014-15 world cotton prices as measured by the A Index by 3 cents from last month to 85 cents, down from 91 cents in 2013-14.

Meanwhile, non-commercials expanded their net short position in U.S. futures alone by 3.7 percentage points to 4.3 percent of the open interest during the week ended July 29. Commercials bought 6,761 lots to hike their net longs to 8,849 lots.