* USDA cotton plantings estimates in line with projections
* Bullish technical factors helped push prices up
By Carole Vaporean
NEW YORK, June 29 (Reuters) – Cotton futures finished the week strong, rallying with a number of commodity and financial markets following an agreement among European leaders on a number of measures to ease the region’s debt crisis.
“The big feature was the European Union agreement. It sent the stock market up and all of the outside markets and the dollar down,” said Mike Stevens, veteran cotton analyst in Mandeville, Louisiana.
Benchmark December cotton on ICE Futures U.S. climbed 2.62 percent, or 1.82 cents, to end at 71.33 cents per lb, after reaching a one week high earlier.
December volume was healthy at 14,197 lots. The total count of 17,613 lots was about 50 percent below the 30-day norm, Thomson Reuters data showed.
Euro zone leaders agreed on measures to stabilize banks for debt-ridden Italy and Spain. They also agreed to let rescue funds be used without forcing countries that comply with EU budget rules to adopt extra austerity measures.
Given that the deal came on the last day of the quarter, some players participated in the market-wide rally to book last minute profits after a quarter of steep declines for cotton.
Cotton also got a lift from technical factors. Thursday’s price action registered an outside day, a higher high and lower low on the price charts. It set a three-week low, but ended near a two-day high, setting up for a rally in Friday’s session.
Earlier, the U.S. Department of Agriculture reported its acreage estimates for U.S. crops, including cotton.
“These numbers were right in line with expectations. From here, USDA will hold these numbers, but will start adjusting for abandonment,” said Stevens.
Because of cotton’s low price compared with other crops, he added that any acres lost to weather will unlikely be replanted with the fiber crop.
“Cotton is just not competitive with other crops. Any acres that got hailed out or washed out or blown out in the month of June will be replaced with sorghum in West Texas, soybeans in other areas or peanuts in Georgia,” he said.
As of June 1, the U.S. Agriculture Department’s annual acreage report estimated that cotton producers planted or intended to plant 12.635 million acres, well below the 14.735 million devoted to cotton in 2011.
USDA made major cuts to acres in some big cotton growing states like Georgia, North and South Carolina, and Louisiana compared with March, leaving top grower Texas unchanged.
The latest figures were based on field surveys taken during early June and update the USDA’s March prospective plantings outlook. In March, USDA estimated 13.155 million U.S. acres would be planted with cotton in the coming crop year.
USDA said it will release its cotton harvest acre estimates in the August crop report.
In China, the world’s top cotton consumer, textile mills and trading firms, were renegotiating prices and deferring cotton import contracts amid widespread defaults following a slump in U.S. prices and slackening demand, traders said.
Chinese buyers canceled 603,700 bales of U.S. cotton last week, USDA said in its weekly report on Thursday.
Thursday’s official volume picked up to 16,396 lots compared with 12,747 lots a day earlier, ICE Futures U.S. data showed.
Open interest in the cotton market, an indicator of investor exposure, rose to 166,598 lots as of June 28 from 165,403 lots previously, exchange data showed.
(Reporting by Carole Vaporean; Editing by Leslie Gevirtz and Bob Burgdorfer)