* Market looks for weak USDA cotton acreage estimates
* Some square books after declines for much of Q2
By Carole Vaporean
NEW YORK, June 28 (Reuters) – Cotton futures reversed course on Thursday to finish near the two-day high, after participants covered short positions in anticipation of a weak result for the USDA’s annual acreage estimates due Friday.
“I think you had a fair amount of short covering heading into the (plantings) report tomorrow,” said Sharon Johnson, senior cotton analyst at Penson Futures in Atlanta.
On Friday, USDA’s annual plantings data will set the stage for how much farmers will need to plant in the coming 2012/13 marketing year (August/July). The data will give estimates of how many acres were aportioned to other crops as well.
Benchmark December cotton on ICE Futures U.S. rallied to close up 2.28 percent, or 1.55 cents higher, at 69.51 cents per lb.
December volume came to 14,350 lots. The total count of 16,396 lots was more then 50 percent below the 30-day norm, Thomson Reuters data showed.
Johnson added that a market survey circulating among cotton traders may have shown a lower acreage figure than some expected and acted as a trigger to push prices up.
Once short covering got underway, brokers said stop-loss buy orders were triggered, sending prices to their two-day high.
In March, a Reuters survey showed U.S. farmers were expected to sow 12.74 million to 12.76 million acres of cotton in 2012, a decline of 13.3 percent to 13.4 percent from the 14.72 million acres planted last year.
Earlier, USDA reported its weekly cotton sales data showing a net reduction of 515,000 running bales in the week, due mostly to cancelled orders by China totalling 603,700 RB.
Because that enormous drop for the week was attributed to the current crop year ending next month, there was little impact on December prices.
Some investors may also have bought cotton to square positions as the quarter ends on Friday.
Elsewhere, India’s crucial monsoon rains were below average last week, the weather office said on its website, fanning concerns about output of crops. Insufficient rainfalls have affected plantings of cotton and soybean. The next two weeks could be crucial as late sowings can hit yields.
Ivory Coast exports of cotton totalled 145,708 tonnes from January to May, up about 318 percent compared with the same period last year, provisional port data showed.
Analysts said the rise was due to a resumption of cotton
shipments from regional neighbours, as well as a cotton campaign under way in Ivory Coast.
Wednesday’s official volume came to a thin 12,747 lots, ICE Futures U.S. data showed.
Open interest in the cotton market, an indicator of investor exposure, fell to 165,403 lots as of June 27 from 166,771 lots a day earlier, exchange data showed.
(Reporting by Carole Vaporean; Editing by Leslie Gevirtz)