Cotton futures prices on the Intercontinental Exchange (ICE) were mixed this week but consolidated near unchanged Wednesday as USDA's supply and demand outlooks added more detail to the prevailing market anticipation of dwindling supplies and accumulating demand.

Wednesday's report from USDA did not contain any big surprises, but it confirmed that the supply situation in current crop is not only extremely tight but seems to be getting tighter. The seasonal gap between global production and global consumption now amounts to 13.46 million bales, and with consumption still trending higher, it probably will take a 15 percent increase in global output next year just to keep stocks from falling further.

Briefly summarizing the report, the department's estimates for 2009-10 included higher domestic mill use and lower ending stocks this month. U.S. Production and exports were unchanged. Domestic mill use was raised 100,000 bales to 3.5 million, reflecting higher consumption in the months of November through January. Ending stocks were forecast at 3.2 million bales, 20.6 percent of total use.

A combination of slightly lower production and slightly higher consumption reduced forecast world ending stocks from last month. Production was reduced for China and Uzbekistan but raised for Brazil and Turkmenistan. Consumption estimates were raised for Turkey, Vietnam, and the United States, partially offset by a reduction for Pakistan which was based on a recent policy change to limit yarn exports.

USDA raised world trade two percent, reflecting higher imports by China, Turkey, and Vietnam which more than offset a decrease for Pakistan. World stocks were reduced nearly 700,000 bales, a decline of just over one percent from last month.

In other news, this week's export sales report showed the cotton pipeline still is open, but at a reduced flow rate. The shipment figure, as predicted, was much better as merchants pushed bales on board ahead of approaching sea-sonal freight rate increases. The U.S. still is running well ahead ofthe export sales pace required to hit the current USDA endof season target.

The government agency reported net export sales of 131,900 bales for delivery in 2009-10 forthe week ended March 4, down one percent from the previous week and 50 percent lower than the four-week average. Featured buyers were Turkey, Indonesia, Mexico, and Pakistan. Net sales of 19,100 bales for delivery in 2010-11 were for South Korea, Mexico, and Japan.

Two percent higher than the previous week, export shipments of 324,300 bales reached a new marketing year high. Primary destinations were China, Turkey, and Mexico.

In the spot cotton market, growers in Texas, Oklahoma, and Kansas sold 1,356 bales online in the week ended March 11 compared to the previous week when 3,940 bales were traded. Prices received by producers ranged from 62.40 to 71.98 cents per pound versus 67.06 to 70.58 cents per pound one week earlier.

Analysts said market focus now will shift more noticeably to USDA's spring planted acreage intentions. USDA said in a preliminary report that U.S. producers are likely to plant 10.5 million acres of cotton in 2010 as recent high prices make the fiber more attractive compared with alternative crops such as soybeans and corn. The department is scheduled to release its 2010 spring plantings report on March 31.