Shurley: Cotton Prices Need Some Kindlin’, But How and When?
September 29, 2025 USDA’s September crop production and supply/demand numbers were mostly “market neutral.” Here’s a summary of some of the major factors:
- The projected 2025 U.S. crop was increased just slightly — up 10,000 bales from the August estimate based on updated FSA certified acres data and revised yield estimates.
- Projected U.S. exports for the 2025 crop marketing year were unchanged at 12 million bales.
- World Beginning Stocks on hand Aug. 1 were lowered approximately 1.0 million bales due to revisions in the 2024 crop year. World use was raised 1.2 million bales.
- Projected 2025 World production was raised just over 1.0 million bales, accounted for mostly by larger than expected crops in Australia, India, and China. Production was lowered for Mexico and Turkey.
- Brazil production and exports were unchanged from the August estimates.
- World projected use/demand for the 2025 crop year was increased almost 1.0 million bales to 118.83 million bales. That’s good…but now lower than the revised 2024 Use number.
So, it appears now (thanks to the revision up for 2024) that 2025 World use/demand is presently headed in the wrong direction. I don’t know if this “numbers jockeying” make much, if any, difference to the market or not. But to me, it can’t be good to see lower demand for 2025.
Prices (December futures) continue in the 66 to 70/71 cents range. Price has not responded to decreased U.S. acreage and production.
Therefore, I can only surmise that (1) crop condition may be compensating somewhat for reduced acres and/or (2) the market is still uncertain about demand and the U.S. role in market share and exports. Markets do not like uncertainty and inconsistency. Apparently, improved prices (something with a 7 in the front) are not likely unless demand signals get stronger and/or the U.S. crop takes another cut (which we really don’t want).
Overall crop condition is “okay” but really not doing all that well and appears to be and could be slipping. As of the Sept. 21 report, 18% of the crop was rated poor or very poor compared to 14% the prior week. Texas was 22% poor or very poor, Georgia 16%, and Tennessee 39%.
At what point (in acreage and expected production and crop condition) would price care about the U.S. crop? Or does it?
It’s early, but export sales so far for this 2025 crop marketing year total 4.2 million bales. This compares to 5.16 million bales last year at this time. Shipments so far total 852,000 bales compared to 951,000 bales last year.
Shipments need to average approximately 242,000 bales per week to reach the current USDA projection of 12 million bales for the marketing year ending July 31. Thus far — and we’re just getting started — shipments have averaged approximately 138,500 bales per week.
I’m going to safely assume that a grower doesn’t want to sell now at these low prices and hopes (is willing to take the risk) that price will eventually improve. But what do you do if you want or need cashflow at harvest time but also want to postpone selling?
If this is you, I can think of three ways to do this:
- Store the crop in loan
- Sell on a deferred price (on call) contract
- Sell and buy a Call Option
None of these are perfect, so you have to consider the pros and cons of each — including the risk you’re taking/not taking with each. Of course, none of this works if prices don’t improve, and you’d have to be willing to take that risk.
Comments and opinions expressed in this article are solely those of the author.
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