Don Shurley
UGA Emeritus Cotton Economist, University of Florida
USDA’s monthly supply and demand estimates and crop production projections for October did hold a little surprise. But the reports are likely to be “neutral” as far as impact on the market and prices. The following are some of the major factors for the 2026 crop year compared to the September report
-
The US crop is now projected at 13.44 million bales—up 240,000 bales from last month’s estimate.
-
US exports remain projected at 12.3 million bales.
-
World production was increased. Accounted for by the US and a 500,000 bale increase for Brazil.
-
China was unchanged from last month.
-
World Use/demand was raised slightly and is now over 123 million bales.
-
Imports were increased for India and Vietnam.
Acres planted and to be harvested were unchanged from the September estimate. Production was increased, surprisingly, because the expected US average yield increased/improved. Expected yield increased in 10 of 17 states.
Compared to last month’s estimates, projected yield declined in only 4 states. Texas upland yield increased slightly but ELS yield declined sharply. Georgia yield remained unchanged. Among the largest increases, Tennessee increased 10.5%, Louisiana 8.7%, and New Mexico 14%.
Overall, US crop condition has not improved. Weather and crop condition is still very much a factor. As of October 4th, 37% of the crop was rated poor or very poo5—Texas 54% poor or very poor.
Although it’s still a weather market to a moderate degree, short of another cut in the size of the crop, this market needs the support of good demand news.
Prices (December futures) have made a bit of a rebound from the recent dip to the 78¢ area. We are back above 80¢ but that’s certainly not where we eventually want to be. We could/should now have support at 78¢ to 80¢. If the market can solidify now and find reason to improve further, we can look at 82¢ and 84¢ as short-term higher targets.
–
Hopefully, and I feel confident that most producers probably have, already got some portion of expected production priced at 86¢ or better December futures. Depending on how much you’ve done and the risk you want to take from here on out, if prices can and will continue to improve, futures at 84¢ to 86¢ or better might be good opportunity now or later to step up and add to sales.
Demand has been problematic. U.S. “domestic mill use” (U.S. produced cotton used in U.S. textile mills) is essentially non-existent at only 1.5 million bales. It is hoped that recent policy and industry initiatives will begin to reverse this. World demand has slowly improved—just over 123 million bales currently projected for the 2026 crop year compared to just under 119 million bales 2 years ago.
–
US exports have declined and leveled off. China, once our #1 export destination now imports very little U.S. cotton. Currently, the U.S. and China are working on a framework to reduce tariffs on $30 billion of “non-sensitive and agricultural goods”. Cotton is included among the products listed for tariff reduction.
Don Shurley
UGA Emeritus Cotton Economist, University of Florida
by Doug Mayo
Link to Original Article: https://blogs.ifas.ufl.edu/jacksonco/2026/10/16/cotton-market-policy-insights-october-report-is-neither-trick-nor-treat/