The combination of sustained export demand, a respectable final domestic consumption report, media reminders about huge cotton losses in Pakistan, unseasonably cold temperatures in portions of West Texas, and extremely strong technical signals took cotton futures prices on the Intercontinental Exchange (ICE) to new seasonal highs this week.

USDA's U.S. export sales and shipment report total was 48 percent below last week's figure with net export sales of 245,800 bales in the week ended August 26. Normally, that might have been a disappointing number, but traders already were expecting a slowdown in export off take on this report. Featured buyers were South Korea, Brazil, and Turkey. Net sales of 17,600 bales for delivery in 2011-12 were primarily for Japan, Guatemala, and Mexico.

Export shipments of 219,600 bales were down nine percent from the previous week and 21 percent from the fourweek average. China, Mexico, and Turkey were the primary destinations.

"For the current marketing year, we now have total commitments of 7.2 million bales, of which a little less than a million bales have been shipped thus far," a trader said. "The figure is almost half of what the USDA currently projects for the entire season, and we're only one month into it."

In other news, Pakistan may miss government cotton production targets by approximately 2.25 million bales due to devastation caused by flooding. At present, production of 11.75 million bales is expected versus the set target of 14 million for the 2010-11 season. Pakistani mills already have finalized deals with many Indian exporters to import one million bales of cotton. However, American farmers are hoping to see increased cotton demand from Pakistan when more U.S. cotton is available for sale.

Overall, the U.S. crop seemed to be slightly ahead of schedule at this point in the season. Defoliation was gaining momentum in the Mid-South and Southeast and pickers were starting to become active. Market observers will continue to monitor growing conditions as the nation's crop still is vulnerable to adverse weather over the coming weeks. Analysts will keep a keen eye on developments in Texas, the nation's largest cotton producing state.

The crop in the Lone Star state was progressing well as USDA reported an estimated 46 percent of the crop was in good condition and 18 percent was rated excellent as of August 29. An estimated 15 percent of bolls were open in Texas, which was behind the five-year average of 20 percent for this time of year. The department said the West Texas crop still was a bit behind, and harvest was not expected to be underway until mid-October.