* U.S. cotton estimate cut by 1 million bales
* Texas drought hits U.S. cotton production
* Market jumps after USDA report
NEW YORK, June 9 (Reuters) - U.S. cotton futures climbed Thursday, after a U.S. government report cited the worst droughts in a century to hit key growing state Texas for cuts in its 2011/12 cotton production estimate, analysts said.
USDA reduced its outlook for 2011/12 U.S. cotton output to 17 million (480-lb) bales from the 18 million forecast last month [WASDE21].
Benchmark December cotton futures CTZ1 on ICE Futures U.S. jumped 2.64 cents to $1.3279 per lb by 9:33 a.m. EDT (1333 GMT). The session top hit $1.3289.
"The big news is the crop cut. It's so rare that they do it," said Sharon Johnson, senior cotton analyst at commodities brokerage Penson Futures.
The last time the USDA reduced its estimate of U.S. production from the May to June supply report was 1998.
"That was a surprise. That really tells you how serious the situation is," said Mike Stevens, an independent cotton analyst in Louisiana.
Analysts said, the latest USDA reading may set the market up for another rally, after prices hit a record high early in 2011. Cotton was the best performing commodity of 2010, rising some 90 percent in value. <^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
National Drought Mitigation Center map:
here
Graph: Texas cotton harvested, planted: 1990 to present:
Drought hit-Texas could see cotton plantings hit in 2011:
r.reuters.com/cyq79r <^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
The Texas drought is one of the worst in a century and may force cotton farmers to abandon up to a third of the crop in a state that accounts for nearly half of all U.S. cotton production. [ID:nN27436894]
The weather forecast for the state calls for more dry and hot conditions through the weekend and into Monday, a report by forecaster Telvent DTN said.
Total volume traded Thursday reached almost 4,000 lots at 9:15 a.m., Thomson Reuters preliminary data showed.
