The cotton market seemed mostly unfazed by the volatile outside markets this week. The buoyancy was credited to the fact that fundamental news in the cotton market has remained positive. Meanwhile, traders are keeping an eye on weather conditions in the U.S. Cotton Belt.

Almost perfect weather and beneficial rainfall have set the stage for an incredible 2010-2011 cotton crop in most of Texas, Oklahoma, and Kansas. In fact, farmers said pre-plant moisture levels were better than many had seen in generations.

The last week of May, the air was filled with optimism as planting was progressing smoothly, and the amount of acreage dedicated to cotton was expected to increase in all three states. At the same time, cotton plants already were thriving in South Texas where producers looked forward to a “phenomenal” crop after several years of drought and lower than expected yields.

Looking forward to the upcoming crop, the weather will be a point of interest for all of those in agricul- ture in general, and in cotton in particular. Current USDA data shows the U.S. will plant a healthy sized cotton crop this year which, under ideal conditions, could yield as much as 18 million bales.

“The bottom line is that global demand for cotton is steadily outgrowing supply," an industry observer said. “The hope is that market prices will continue to draw on support from expected tight inventories.”

Into the next year, many expect an ongoing steady-tosolid demand for cotton. Global mill use rebounded faster and stronger than expected after a sharp drop in 2008-09 caused by the global financial and economic crisis. Although many economists believe the global recession is over, other market influences, including euro-zone debt issues, came to light this spring. The situation generated worries about the economy and also boosted the U.S. dollar, both of which normally hurt commodity prices.

“The fragility of the world economic system is worrisome,” a trader said. “There are many different factors out there that could affect both the price of cotton and the continued demand in the upcoming year.”

In other news, this week's export sales and shipment figures supported USDA’s current export projection. In the week ended May 20, the department reported net U.S. export sales totaled 242,200 bales. The figure was roughly unchanged from the previous week and 15 percent higher than the four-week average. Featured buyers were China, Turkey, Vietnam, and Taiwan. Net sales of 104,000 bales for delivery in 2010- 11 were mainly for Vietnam, Indonesia, and Peru.

Export shipments of 286,100 bales were up five percent from the previous week and 11 percent from the four-week average. Primary destinations were China, Turkey, Mexico, and Indonesia.

Sales on the spot cotton market also were higher as growers in Texas, Oklahoma, and Kansas sold 219 bales online in the week ended May 27 compared to the previous week when 58 bales were traded. Prices received by producers ranged from 74.22 to 79.00 cents per pound.