As commodity and equity losses eased after the rallying U.S. dollar sent prices sprawling, cotton prices on the Intercontinental Exchange (ICE) bounced higher from three-week lows on Wednesday. However, fund traders selling a broad range of commodities and equities in the wake of macroeconomic concerns brought cotton prices tumbling back down again.

"Uncertainty surrounding Greek and European sovereign debt Thursday caused speculative funds to sell bullish positions in many commodity markets," an analyst said. "Traders sought safer bets, like the dollar, which left agricultural commodities and most metal prices lower," he concluded.

Equity losses and continued weakness in the "euro zone" could lead to weaker cotton demand because cotton is particularly sensitive to broader economic moves. "Textiles such as sheets and socks are among the first items cut from household budgets when finances are tight but also among the first purchases made when discretionary purchases become feasible again," an observer explained.

In other news, USDA's export sales figures were in line with analyst expectations. Market observers said there was nothing in the report to either pressure prices or aggressively underpin current prices. For the week ended April 29, the department reported net export sales of 165,800 bales for delivery in 2009-10. The figure was down 10 percent from the previous week and 33 percent from the four-week average with Turkey, Pakistan, and China as the week's top buyers. Net sales of 109,400 bales for delivery in 2010- 11 were mainly for unknown destinations along with Guatemala and El Salvador.

Export shipments of 221,900 bales were down 19 percent from the previous week and 20 percent from the four-week average. Primary destinations were China, Turkey, and Mexico.

Spot cotton sales were drastically lower as the amount of available cotton dwindles. Growers in Texas, Oklahoma, and Kansas sold only 18 bales online in the week ended May 6 compared to the previous week when 225 bales were traded. Prices received by producers ranged from 68.29 to 68.50 cents per pound versus 71.88 to 80.47 cents per pound one week earlier.

This time of year, cotton market observers are focusing on the planting progress of the 2010-11 U.S. crop as many states now are having weather-related difficulties.

Cotton fields in eastern Arkansas received significant rainfall from last weekend's heavy storms, but little to no crop damage was reported and only 26 percent of the state's cotton crop had been planted as of May 2. Rainfall totals in West Memphis exceeded eight inches, and precipitation elsewhere in the Arkansas Delta was heavy.

Flooding concerns in western Tennessee continued as rivers and other waterways spilled out of their banks and many fields remained under water. Fortunately, only eight percent of the state's crop had been planted, but further planting likely will be delayed as growers deal with other aftereffects of the recent severe weather and wait for fields to dry. Some recently planted fields in Alabama probably will have to be replanted following heavy rains resulting in a later crop for many growers in the state.

Mostly clear, favorable conditions were in place across Texas' major cotton growing regions this week. Growers in the Southern High Plains have been waiting for warmer weather to begin cotton planting, and temperatures climbed past the 90 degree mark across much of Texas this week under clear skies. State wide, cotton plantings were estimated at 26 percent complete, slightly ahead of the previous year and the five-year average.