Tightened supply availability, dollar weakness, support from outside markets and preparations for the looming notice period for May deliveries boosted cotton futures in heavy dealings and switch trading last week.

Spot May advanced 446 points for the week ended Thursday to close at 93 cents, July rose 141 points to 89.80 cents and December gained 76 points to 88.30 cents. First notice day for May deliveries is April 24.

May traded as wide as 357 points over July even as index funds rolled longs forward and shorts rolled some positions and covered others amid talk of a strong taker or takers of May deliveries. Spreads accounted for up to 70 percent of the daily volumes, which peaked at a whopping 61,284 lots at midweek.

The front of the board propped up the whole market, analysts said. Index funds were reported selling May and buying July, then rolling all the way to December. Open interest overall dropped 6,973 lots to 185,708 going into ThursdayΆs session, with MayΆs down 29,548 lots to 37,984.

Cash grower sales totaled 2,278 bales on The Seam, compared with 2,230 bales the previous week. Prices fell to an average of 78.54 cents from 79.06 cents, while premiums over loan repayment rates declined to 26.84 cents from 29.19 cents.

The USDAΆs updated supply-demand estimates showed lower U.S. ending stocks, as mostly expected, and a huge buildup in the world carryout based largely on statistical adjustments for prior years for India.

U.S. production fell 119,000 bales to 15.555 million based on USDAΆs March ginning report and exports rose by 400,000 bales to 11.4 million to reflect strong shipments in recent weeks. Domestic mill use was unchanged at 3.4 million bales.

Ending stocks fell 500,000 bales to 3.4 million. This is a stocks-to-use ratio of 23 percent, down from 27 percent foreseen last month. The USDA forecast an average farm price of 89 to 93 cents, up a cent on the lower end. This nudged the midpoint up 50 points to 91 cents.

The U.S. supply slid to 18.16 million bales — beginning stocks of 2.6 million plus the crop — to the lowest in 21 years, down 13.7 percent from 21.05 million bales in 2010-11.

Globally, China and India accounted for a combined 49.4 percent of world stocks projected at a new all-time high of 66.07 million bales, up 3.75 million from a month ago. Beginning stocks jumped a huge 3.25 million bales to 50.51 million.

Historical adjustments for India boosted its beginning stocks by a like amount, while its carryout jumped 1.6 million bales to 9.55 million. Analysis of IndiaΆs reported exports for August-December 2011 indicated beginning stocks were significantly higher last Aug. 1 than previously estimated, USDA said.

IndiaΆs production fell by 500,000-bales to 26.5 million and exports rose by 1.15 million bales to 8.9 million despite an ongoing ban on fresh export registrations. ChinaΆs projected carryout surged 3 million bales on the month to 23.08 million, imports rose by 2 million bales to a record 20.5 million and domestic mill use fell a million bales to 42.5 million.

Government accumulation of cotton in ChinaΆs national reserve is constraining free supplies, raising its imports while limiting consumption. ChinaΆs ending stocks alone account for 35 percent of the world carryout. The USDA estimate assumes minimal release of reserve stocks before the end of the marketing year on July 31.

BrazilΆs exports rose by 300,000 bales to 4.2 million and ending stocks slid to 9.31 million bales. Not much more can be exported from Brazil because of logistics, an analyst said. Ending stocks from China, India and Brazil combined make up nearly 63 percent of the world carryout.

Projected world consumption fell 980,000 bales because of the reduction for China and is now estimated at 107.74 million bales. This is down 6 percent from 2010-11 and the lowest since 2003-04. World production dipped 500,000 bales to 123.14 million, with foreign output now expected to outpace foreign consumption by 3.24 million bales.

While the world may be awash with cotton, as USDA says, with the May delivery period rapidly approaching, U.S. statistical tightness “is showing up in spades,” Mike Stevens, independent cotton analyst of Mandeville, La., said on the Ag Market Network conference call.

Right now, the spot month rules, he commented, adding that whatever is going on in the May contract probably will be settled well before the delivery period. It was expected to have been partly resolved by options expiration on Friday.

“I canΆt help but believe someone big — probably a commercial — has found themselves on the wrong side of the market,” Stevens, who grew up in Lubbock, remarked.

Imagine, he exclaimed, where the market would be without the rolling of long May positions forward by the big Goldman Sachs index fund. May had traded at a discount to July through most of February and March.

The veteran analyst voiced doubt that the cotton involved in the massive historical adjustments for India still overhangs the market.

“India doesnΆt have the kind of infrastructure required to carry that much cotton for years,” he said. “And it doesnΆt make sense that if they had that kind of excess they would feel the need for an export embargo.”

The market shrugged off net U.S. export sales cancellations of 50,000 bales for delivery this season. This dropped 2011-12 commitments to 11.472 million running bales, nearly 4 percent above the new USDA estimate.

Shipments slowed sharply to 212,300 bales, lightest since the week ended Jan. 5. Exports for the season of 7.194 million running bales amounted to 65 percent of the USDA estimate, against 72 percent of final shipments at the corresponding point last year. Shipments need to average roughly 241,500 running bales a week to reach the USDA forecast.

New-crop sales fell to 13,800 bales from 96,600 the week before. Commitments for 2012-13 commitments were 930,200 bales.