After closing at the highest levels in two years on April 23, cotton futures prices on the Intercontinental Exchange (ICE) closed lower four consecutive days as speculators exited positions over concerns about whether recent higher prices were justified by the supply/demand picture.

The cotton market seemed to have lost some of last week's momentum from the announcement of India's export ban. The trade ban shook the market as India, the world's secondleading cotton producer and exporter, cut off shipments in an effort to alleviate high domestic prices. Though India said it would recertify export registrations for sold, unshipped cotton, the delay and uncertainty sent merchants and commercial traders looking for new sources of cotton.

World cotton production is expected to fall short of consumption by 15 percent in the season that ends July 31, USDA forecasts show. In the upcoming year, analysts expect U.S. cotton to be a major source of mill buying as the season draws to a close. World fiber demand has rebounded from a drop-off sparked by the credit crisis. Now, textile demand is returning as household budgets ease, and retailers are looking to restock shelves. However, textile manufacturers, most of which are based in Asia, are having difficulty securing raw supplies following a lower-than-expected output and ongoing tight credit.

Meanwhile, USDA's export sales report was deemed "more than respectable" by most analysts as net upland sales of U.S. cotton in the week ended April 22 were 171,900 bales. The figure was 51 percent lower than the previous week and down 33 percent from the four-week average. Turkey, Pakistan, Bangladesh, and China were the week's top buyers. Net sales of 39,600 bales for delivery in 2010-11 were mainly for Thailand, Indonesia, and South Korea. Export shipments of 275,300 bales were 17 percent lower than the previous week and down one percent from the four-week average. Primary destinations included China, Turkey, and Mexico.

A market observer explained that evidence supports the idea that a lack of space on ships headed out of the U.S. may have been partly to blame for the relatively light shipment number.

Closer to home, spot cotton sales were much lower in the week ended April 29 as Texas, Oklahoma, and Kansas cotton producers sold only 225 bales online compared to the previous week's 5,108-bale sales figure. Average prices received by producers ranged from 71.88 to 80.47 cents per pound versus 66.91 to 76.85 cents per pound the previous week.

The market now is paying close attention to cotton planting activities in the U.S. and throughout the world. The 2010 U.S. cotton crop was 16 percent planted in the week ended April 25, up from 11 percent the previous week but lower than the 18 percent average, according to USDA data.

Sunshine and warm temperatures helped growers throughout the Texas Coastal Bend where planting is reported to be almost complete. Cotton growing areas have been reported to be in excellent shape throughout Texas due to above average rainfall and soil moisture levels ranging from surplus to adequate. However, some of that precipitation slowed planting. Texas cotton producers had planted 15 percent of their projected acreage by April 25 compared to the state's 20 percent five-year average.

"A look at last year's level of progress in the U.S. shows that, as a whole, we're ahead. Unfortunately in Texas, where the largest amount of the nation's cotton is produced, not only has planting fallen behind but the crop is even further behind than last season's delayed crop," a market observer said. "It's early, but these are not the numbers that we need to see if the U.S. is going to fully play its role in helping offset what has become the largest production/ consumption deficit on record," he concluded.