Author:  Don Shurley, Emeritus UGA Crop Economist

Cotton prices (December 26 futures) continue with an 8 as the front number.  I’m not surprised by this given the mix of bullish factors now in play.  But, I’d be less than 100% honest if I didn’t also look at this with a somewhat cautious eye.  It’s a natural reaction and I know many growers are taking the same approach.  A lot is still unknown and could change as we proceed forward.

December futures has trekked strongly upward—up roughly 14 ¢ (roughly 19%) since mid-March.  Note—there have been 2 “whoa, wait just a minute” moments on the way up—first at 80-81 ¢ and again at 83-85 ¢.

I know what you are probably thinking and saying “Don, what on Earth are you talking about?”  These are times where the market appears to pause and think before, thankfully, continuing up.  Why do I bring this up?  First, to show you graphically that this 14 ¢ increase has not been without some reservation for some reason along the way.  Secondly, these price levels could now act as “support” if/when the market decides to turn lower.  In other words, a return to the 70’s would not likely be without roadblocks.

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As we move forward, several market factors will come into play:

• So far in the month of May, we’ve had rainfall across a lot of the cotton area (although the Texas Panhandle area has received little to none). Does this continue on a timely, as needed basis?
• Drought conditions have likely diminished short-term but the longer-term threat is not likely over,
• Drought and lack of rainfall cause crop condition and production concerns. Will higher prices result in a shift of some acres back to cotton? If so, does this offset some of the yield concerns?  USDA’s Acreage report will be released June 30.
• Geopolitically—the Trump-Xi China Summit and the Iran war could have impacts.

US exports will be watched as demand is still uncertain.

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For the past 4 weeks, export sales have averaged 165,650 bales per week.  Shipments have averaged 349,350 bales per week.  Shipments need to average 288,300 bales per week for the remainder of the marketing year to meet USDA’s projection of 12 million bales for the 2025 crop marketing year ending July 31.  So, we’ve been above that pace.  China is still “greater than zero” as a customer.  Sales to China have totaled less than 600,000 bales or only 5% of sales thus far for the marketing year.

USDA’s monthly production and supply/demand projections for May were, I’d say, slightly bullish at this point.  The May numbers also always contain the first projections for the new crop.

• World Use/demand for the 2025 crop year was revised up to just over 120 million bales. IMHO, this is an important psychological milestone.
• World Use for the 2026 crop is projected at 121.69 million bales.
• World production for 2026 is projected at 116.04 million bales—down 6.6 million bales from last season. Reductions are forecast for most major countries including the US, Australia, Brazil, China, Turkey, and Pakistan.
• So, global supply vs demand is expected to tighten.
• US exports for the 2026 crop year are expected to increase only a modest 300,000 bales from the 2025 crop year.

The US crop for 2026 is projected at 13.3 million bales—down 600,000 bales from last year and 1.1 million bales less than for 2024.  This is based on the USDA’s March Prospective Plantings of 9.64 million acres, average acreage abandonment of 23%, and average yield of 866 lbs/acre compared to 852 last year, and 892 in 2024.

Of course, these estimates will be revised monthly.  It’s worth noting that USDA projects the average price received by growers for upland cotton for 2026 to be 73.0 ¢/lb compared to 63.0 ¢ for the 2025 crop.

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Don Shurley is Cotton Economist- Retired, Professor Emeritus of Cotton Economics, University of Georgia.  SHURCOTN is the educational brand of Dr. Shurley’s continued work in economics, marketing, and policy.  He is solely responsible for the content and opinions expressed.  Any data is from sources believed to be reliable, but its accuracy cannot be guaranteed.  Funding support from Americot is gratefully acknowledged.  Neither the author nor Americot assume responsibility for actions taken as result of this content. This publication not affiliated with University of Georgia.

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