Texas drought, shifting markets shape 2026 crop outlook

While timely rains supported strong cotton yields in 2025, the upcoming season is beginning under La Niña conditions that have kept much of Texas warm and dry since the fall. The pattern is expected to fade by March, but dryness could persist into key planting periods across the state’s staggered cotton calendar, said John Robinson, Ph.D., AgriLife Extension cotton economist in the Texas A&M Department of Agricultural Economics.

Robinson said that contrasts sharply with last year’s wetter-than-normal conditions and raises the likelihood of lower production and more volatile pricing through the spring and early summer.

La Niña shifts cotton outlook with early drought risk

Even if weather-driven rallies appear, Robinson said they rarely hold through harvest, leaving growers exposed to timing risk in a market that exports 85%-90% of U.S. cotton and responds quickly to global demand signals.

The state’s cotton sector also continues to feel a cost squeeze, with input costs outpacing gains in market prices and tightening margins across Texas row-crop operations.

Corn–soy acreage balance and global wheat pressures ahead

Beyond cotton, 2026 pricing dynamics in corn, soybeans and wheat will influence planting decisions and market behavior, especially in the Corn Belt and export-driven oilseed markets, said Mark Welch, Ph.D., AgriLife Extension grain economist in the Department of Agricultural Economics.

Corn remains a primary price driver for grain commodities and continues to shape acreage decisions in the Midwest. U.S. corn plantings reached roughly 98.8 million acres in 2025, rising by more than 8 million acres over 2024, and Welch said the market will watch whether those acres hold or begin shifting toward soybeans as relative prices adjust.

Futures currently reflect soybeans near $10.86 per bushel and corn near $4.50 per bushel, Welch said.

Soybean prices may strengthen further in 2026 due to competitive returns and trade positioning.

Global supply remains heavily influenced by South American production, led by Brazil, now the world’s largest soybean exporter and a major factor when it comes to pricing U.S. soybeans, Welch said.

Geopolitical outcomes could impact crop prices

Even though the U.S. only accounts for just over 6% of the world’s wheat production, it accounts for about 11% of global wheat exports. A smaller U.S. winter wheat crop could lend upward price support, Welch said.

However, geopolitical outcomes could sharply alter that landscape. For instance, an end to the war in Ukraine could drive wheat prices lower, Welch said.

Taken together, Robinson and Welch expect continued weather uncertainty in the Lone Star State, competitive acreage decisions in the Midwest, and international influences in soybeans and wheat markets to define early 2026 as growers weigh planting choices.

AgriLife Extension district reporters compiled the following summaries:

Panhandle

A major cold front moved through the district, bringing snow showers and accumulations of 2-3 inches. As temperatures warmed, melting snow helped improve shallow topsoil moisture, benefiting emerged small grains. Overall soil moisture levels ranged from very short to adequate. Pasture and range conditions were very poor to good, and winter wheat was mostly fair. Cow-calf pairs continued grazing on standing corn stubble while producers increased hay feeding during extended below-freezing temperatures.

Rolling Plains

A strong cold front brought sleet, snow and arctic air, with snowfall totals of 5-8 inches and several days of temperatures in the teens and single digits. Moisture from the storm was expected to benefit dryland wheat and pastures once temperatures rise. Agricultural activity focused on livestock care, including winterizing operations and increased supplemental feeding. Winter wheat conditions were fair to poor, and pasture and range conditions were poor to fair. Some livestock and potential calving losses were reported, and producers expressed concerns about possible impacts to bull fertility.

North

Topsoil moisture was mostly short across the district. Pasture and range conditions were poor to fair. A winter storm brought sleet and temperatures in the mid-teens, limiting field activity. Additional crop and forage assessments were expected to occur once the ice thaws. Winter wheat was reported to be doing okay, and livestock conditions remained good.

Far West

Cold temperatures and widespread rain and snow impacted the district, with average precipitation of approximately three-quarters of an inch in some areas. Snow accumulation caused temporary travel delays and halted fieldwork. Moisture improved soil conditions, though extended freezes stressed small grains and winter forage. Pasture and rangeland conditions were mostly very poor to poor. Topsoil and subsoil moisture remained very short to short. Winter wheat had emerged in most areas, with growth expected to respond once temperatures moderate. Livestock conditions ranged from poor to fair, with supplemental feeding ongoing.

West Central

Extreme cold, ice and snow affected the district, as temperatures dropped into the teens and below-freezing conditions lasted more than 50 hours in some areas. Ice accumulations reached up to one-quarter of an inch. Although winter storms provided some moisture, much of it remained frozen, limiting immediate benefit. Soil moisture remained a major concern with drought returning to several areas. Winter wheat, oats and small grains were stunted or damaged by cold and drought, with some wheat being zeroed out. Pasture and rangeland conditions were mostly poor to fair. Livestock were generally in good condition, though winter feeding programs were fully underway.

Central

Rainfall was followed by strong cold fronts that brought ice, sleet and snow. Crop damage was anticipated, and concerns remained about calving losses. Crop and rangeland conditions were extremely poor. Potential wildfire fuel loads were very high due to abundant spring growth that has dried and gone dormant. Wheat and oats emerged but remained in very poor condition due to a lack of moisture and cold stress. Livestock were in fair condition, with producers supplementing feed. Cattle, sheep and goat markets remained fairly strong.

Southwest

Warm conditions early in the week gave way to an Arctic cold front that brought freezing rain and sub-freezing temperatures. Precipitation totals ranged from 0.25-1 inch, with additional mixed precipitation helping drought conditions. Freeze damage was noted on landscape plants and rangeland, though livestock losses were minimal. Hay supplies declined as producers increased supplementation. Livestock conditions remained good, and some hay producers planned to renovate pastures following recent moisture.

Southeast

Moisture remains a common concern across the district. Small-grain conditions varied, ranging from spotty to good. Winter wheat and oats emerged 100%. Soil moisture levels ranged from surplus to short. Overall conditions remained stable, with producers focused on proactive planning and on maintaining livestock health throughout the winter. Pasture and rangeland ratings were reported as fair to good. Livestock conditions ranged from excellent to good.

Coastal Bend

Extreme cold, ice and hard freeze conditions impacted the district. Rainfall from the winter storm ranged from 0.25-1.25 inches, improving soil moisture slightly. Row crop fields were nearing planting readiness, with fertilizing and weed control underway early in the week. Winter pastures were expected to benefit from moisture, though additional rainfall was needed for regrowth. Pasture and range conditions remained limited, and surface water supplies were low. Cattle were mostly in fair condition, with widespread supplemental feeding and high hay demand leading some producers to downsize herds.

South

Dry, hot conditions prevailed until the weekend, when extreme cold temperatures arrived with little to no moisture. Severe drought persisted, with very short topsoil moisture and limited subsoil reserves. Freeze conditions raised concerns for onions, leafy greens and other sensitive crops, and planting was delayed. Citrus and vegetable harvests continued. Range and pasture conditions were poor, with bare fields and declining stock tank levels. Producers continued supplemental feeding as hay and feed prices remained high. Livestock prices stayed strong, though the worsening drought continued to pressure producers.

Karn Dhingra / Communications Specialist / Texas A&M University

Link To Original Article: https://agrilifetoday.tamu.edu/2026/01/27/texas-drought-shifting-markets-shape-2026-crop-outlook/