Cotton futures held firm on a poor day for agricultural commodities after the International Cotton Advisory Committee warned that the drought-hit US crop would not live up to official hopes.

"Reports from Texas indicate that even irrigated fields are being abandoned - not harvested because of crop failures," the committee, an intergovernmental group, said.

Texas, in the grip of a fierce drought, is the top producing state in the US, the world's biggest cotton exporter.

Furthermore, "surveys for crop insurance claims suggest that yields will be lower than indicated in US Department of Agriculture reports".

The ICAC forecast this year's US crop at 3.4m tonnes, a drop of 540,000 tonnes year on year, and 200,000 tonnes below the official USDA estimate.

'Real possibility of overestimate'

The forecast crystallised doubts of many observers over USDA expectations that the domestic harvest would come in at 807 pounds per acre, only 5 pounds per acre below last year's result, despite the dismal conditions.

Also on Monday, John Robinson, cotton expert at Texas A&M University, questioned USDA statisticians' methodology for predicting yields of irrigated cotton in West Texas, warning that there was a "real possibility of them having overestimated yield".

Professor Robinson added that "I don't think we're in danger of any major upside adjustments" to the national crop, which the USDA is currently pegging at 3.61m tonnes (16.56m bales).

"The question in my mind is how much, if any, the current estimate might be adjusted downward."

Seasons of disappointing US harvests witnessed downgrades of 2-10% in USDA production estimates between the first forecast, in August, and the final figure the following July, his research shows.

This August, the USDA estimated domestic production in 2011-12 at 3.60m tonnes (16.55m bales).

Output downgrade 

Cotton for December delivery stood 2.5% higher at 101.70 cents a pound at 15:10 GMT on Tuesday, outperforming mant other soft commodities and, in particular, Chicago grains.