Spreading has dominated heavy cotton futures trading as most contracts posted slight weekly gains prior to first notice day for March deliveries.

May, now the lead month in open interest and volume, gained 51 points during the week ended Thursday to close at 82.79 cents, bouncing back into the recent range after falling the prior session to its lowest intraday price since Jan. 28. It touched a multi-month high on Monday at 84.01.

March, where first notice day is next Friday following a market holiday on Monday, was the only loser, settling down 38 points to 81.02 cents. July gained 66 points to 83.71 cents and December gained 62 points to 83 cents.

Daily volumes surged as high as 62,100 lots, largest since June, and spreads accounted for up to 70-plus percent. Funds, speculators and commercials rolled positions forward from March. The Goldman roll ended at midweek.

Widening of the March-May spread to 177 points reached near to beyond full carrying charges for many merchants, analysts said, likely encouraging the rolling of short hedges from March to May.

Cash grower-to-business sales slowed to 12,611 bales from 19,083 bales the prior week on The Seam. Prices dipped 21 points to average 75.67 cents, while premiums over loan repayment rates edged up 26 points to 23.74 cents. Daily price averages ranged from 69.90 to 77.10 cents.

The market made the periodΆs highs on twin boosts from USDAΆs bullishly construed updated supply-demand estimates and lower-than-expected U.S. planting intentions reported by the National Cotton Council.

U.S. producers intend to reduce plantings by 26.8 percent this spring to 9.015 million acres, smallest in 30 years, according to the NCCΆs 30th annual early season intentions survey.

Intentions of 8.812 million acres of upland are down 27 percent from last year and 203,000 acres of Pima represent a 15 percent decline. The all-cotton acres would be the smallest since plantings of 7.926 million under the payment-in-kind program of 1983.

With slightly above-average abandonment in the Southwest because of dry conditions and all other states at historical averages, the all-cotton harvested area would be 7.65 million acres. This would be 15.2 percent below the planted area, against abandonment of 23.5 percent last year.

Applying state-level yield assumptions to projected harvested acres would produce a crop of 12.86 million bales, down from 17.01 million bales in 2012. This would be the second smallest crop – just above 12.17 million bales in 2009 – since an output of 9.731 million bales in 1986.

“Planted acreage is just one variable determining final production,” Gary Adams, the NCCΆs vice president for economics and policy analysis, pointed out in a report. “Weather is often a more significant determinant, particularly weather developments in the southwestern U.S.”

With that in mind, the economist added, the U.S. crop could range from a low of 9.5 million to a high of 17 million bales, compared with 17.01 million in 2012.

The potential “swing factor” is particularly large in Texas, where the intentions to cut cotton acres 25 percent to 4.91 million acres still would account for a bulging 55.7 percent of the U.S. upland acreage.

Recent gains in cotton futures and big losses in grains could alter planting plans, resulting in a smaller cut in cotton, some analysts said.

A mid-January forecast by Informa Economics, widely followed Memphis-based consulting firm, was for a 17 percent cut to 10.277 million acres. The NCC survey was conducted from mid-December through mid-January.

Planting decisions are expected to remain especially in flux in the West Texas Plains, always a wildcard in U.S. cotton estimates. In addition to weather and market conditions, crop insurance considerations will be a key factor.

Cotton insurance price discovery for the High Plains is underway this month, based on December futures. Thus far prices far have averaged around 82 cents under relatively low volatility. Closing December prices have ranged from 81.46 to 83.84 cents.

Earlier, USDA unexpectedly raised its 2012-13 U.S. export estimate 300,000 bales to 12.5 million, reduced ending stocks by a corresponding amount to 4.5 million, and nudged the world carryout up a marginal 140,000 bales to a new record high of 81.86 million.

However, ending stocks in the rest of the world outside China slid 1.86 million bales to 39.25 million. The U.S. stocks-to-use ratio fell to 28.3 percent from 30.8 percent foreseen last month.

The USDA raised its forecast average farm price for the marketing year by 3 cents on the lower end and 2 cents on the upper end to a range of 69 to 73 cents. This boosted the midpoint 250 points to 71 cents.

In aggregate, world production, consumption and stocks forecasts showed only slight revisions. But ChinaΆs stocks jumped 2 million bales to 42.61 million, 52 percent of the world carryout.

Significantly higher-than-expected U.S. weekly export sales offered support after a two-day market correction. All-cotton sales for this season climbed to 209,200 running bales during the week ended Feb. 7 from 124,300 the previous week, boosting commitments to 10.38 million RB.

Commitments have reached 86 percent of the expanded export estimate, against 94 percent of final exports at the corresponding point last season, and have narrowed the gap behind year-ago sales to 280,800 bales.

All-cotton shipments dipped to 373,200 RB from the prior weekΆs crop year high of 455,000. Shipments for the season stand at 5.46 million RB, up 982,000 or 21.9 percent from a year ago and 45 percent of the export forecast. A year ago, shipments were 39 percent of final exports.

To achieve the estimate, all-cotton shipments need to average roughly 277,700 running bales a week.

All-cotton sales for shipment in 2013-14 jumped to 189,100 bales from the prior weekΆs 19,400 bales. New-crop commitments climbed to 784,700 bales, widening the lead over forward bookings a year ago 204,000 bales.