Tuesday's triple-digit decline in cotton futures prices on the Intercontinental Exchange (ICE) was matched by an even larger move in the opposite direction on Wednesday; although, traders found it difficult to put their finger on the exact reason for the wide market swings.

"Continued strong export sales show physical demand for cotton, and that adds support to the market," an analyst explained. "Additionally, concerns about 2009 planted acreage for which soybeans and cotton compete are keeping speculators interested in the market."

USDA's export sales report surprised most analysts as net export sales of U.S. cotton in the week ended April 9 totaled 292,400 bales. The figure was up 15 percent from the previous week but down one percent from the four-week average. Pakistan, Turkey, and China were the week's featured buyers. Mexico and Indonesia were primarily responsible for an impressive 119,400-bale sales figure for delivery in 2009-10.

"This week's healthy export sales report showed that while lower prices serve to encourage sales, in the current global environment you don't necessarily need lower prices to sell cotton," a market analyst said.

The department reported export shipments of 230,300 bales were down 20 percent from the previous week and four percent from the four-week average. Primary destinations were China, Pakistan, and Turkey.

As of April 9, cumulative cotton sales stood at 99.9 percent of the USDA forecast for the 2008-09 marketing year versus a five-year average of 89.9 percent. Many in the industry say it is becoming increasingly apparent that USDA will have to further increase its expected year-end export total.

Meanwhile, a local analyst said loan cotton became more expensive this week due to a substantial increase in the average world price of cotton (AWP). The end result was a significant decline in spot cotton demand. Sales dropped in the spot cotton market during the week ended April 16 as producers in Texas, Oklahoma, and Kansas sold just 3,416 bales online compared to 93,447 bales the previous week. Average prices received by producers ranged from 37.69 to 42.79 cents per pound versus 36.59 to 39.57 cents per pound one week earlier.

This week's crop progress report showed that while it still is very early in the season, cotton planting already is behind the five-year average. The only states that have begun to plant are Arizona, California, Louisiana, South Carolina, and Texas. Overall, the 15-state average was eight percent planted compared to four percent last week and the 11 percent norm. Texas was 12 percent planted as of April 13 compared to 16 percent at the same time last year.

The primary reason for the delay in planting is a continuing drought in South Texas. In fact, USDA's drought monitor data for the week ended April 14 categorized the moisture levels across most of Texas as abnormally dry to severe drought. Although a number of rain showers cropped up across the state this week, many of the drought-stricken areas of South Texas received only trace amounts of moisture.

"Recent rains across most of Texas the past week gave many cotton producers a glimmer of hope for soil wet enough for planting," an observer said. "In the past seven days, virtually every of the state except the Lower Rio Grande Valley (LRGV) got at least some rainfall. Unfortunately, cotton producers in the LRGV may not even put a seed in the ground if moisture conditions don't improve soon."