Authored by: Don Shurley, UGA Emeritus Cotton Economist
USDA’s August 2026 monthly crop production and supply and demand estimates were mixed news and should likely have little impact on the market. But anyway, the focus seems to increasingly be on the weather and crop conditions.
Prices (December futures) have been in a good uptrend over the past 3 weeks with only 1 little hint of a hick-up during that time. We’ve been at 80+¢ for most of the time dating back to early July.
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There would seem to be little reason to stop the train. But let’s remember what got us here—prices are based on expectations and then whether or not those expectations are realized. Price has improved 8¢ since the most recent lows. Why? In part, the expectations are that the U.S. crop will decline and global demand will improve (and hopefully U.S. exports as well).
In this week’s August Crop Production report:
- 2026 acres planted was increased 620,000 acres from the July estimate. This will continue to be revised.
- Acres were increased in 13 of 17 states.
- Expected U.S. average yield was lowered 8½% from the July estimate.
- The 2026 crop is now estimated at 13.61 million bales—down from the July estimate and last year.
The following is a summary of the U.S. and World supply and demand estimates for August:
- World demand/use for the just ended 2025 crop marketing year was revised up by almost 1 million bales.
- World demand for the 2026 crop marketing year is estimated at 122.92 million bales—up 1 million bales from the July estimate and 2 million bales higher than last year.
- Compared to last month, demand for 2026 was increased for India, China, and Vietnam.
- U.S. exports for the 2026 crop year were unchanged from the July estimate at 12.3 million bales.
- Brazil’s projected production was increased 250,000 bales and exports increased to 15.3 million bales.
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Crop condition has slowly trended down for much of the season. In the latest report, as of August 9th, condition has dropped markedly for two straight weeks. Texas was 34% poor or very poor, Oklahoma was 20%. By contrast, several states were over 70% good to excellent including Alabama, Arkansas, Missouri, and North Carolina. Georgia was 62% good to excellent.
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The August Drought Outlook calls for drought conditions to persist in parts of Texas, Oklahoma, and the Mid-South with drought development likely spreading further into Oklahoma and Texas. Conditions are likely to improve in the Southeast.
I believe there is some expectation that the U.S. crop may decline from the current 13.61 million bale estimate. How much would also depend on offsetting improvements elsewhere.
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