The run to 93 cents is over. That doesn’t mean it can’t return, but the market has adjusted. The bulls, for now, have lost the momentum. Prices (Dec futures) have dropped over 10 cents since the peak at 93 cents.
Why? And what now? Prices have dropped to a level where there should be support (the red line at roughly 82). When this happens, if prices hold, it could be the basis for a bit of a rebound. But, if there’s enough further negativism in the market, that could break through down to 78 to 80.
In some respects, this slide in price is not consistent with all the supply and demand fundamentals as we know them. So, that should give us hope for a correction.
- USDA’s monthly estimates for September were released last week.
- The 2026 US crop was cut 410,000 bales from the August estimate. Both acres to be harvested and yield were reduced.
- US exports for the 2026 crop marketing year were unchanged at 12.3 million bales—the same as the 2026 crop year.
- Turkey and Pakistan production was dropped and their imports raised accordingly.
- Brazil production raised 250,000 bales, their exports increased.
- World demand/use remained unchanged from the August estimate. No change by major users.
Crop condition rating continues to decline. The most recent rating (as of Sept 13) shows the overall condition of the crop beltwide now dropping below 3.0 (Fair) for the first time. USDA’s cut in expected yield is certainly consistent with this, there could be more to come.
The Texas crop is now rated 49% poor or very poor. Oklahoma is 55% poor or very poor. Elsewhere, with only a few exceptions, the crop is at least 50% good to excellent. Beltwide, the crop is 36% good to excellent.
Compared to the first projections made last month for the 2026 crop, last week’s September projections increased expected yield in 7 states. Yield was reduced in 8 states including Arkansas, Mississippi, Tennessee, Texas, and Virginia.
Exports for the 2026 crop year have gotten off to I guess what could be called, a weak start. It’s way too early but the market has taken notice and this has helped push the market lower. For the most recent 4 weekly reports, sales have been less than 100,000 bales per week. Shipments have been less than 200,000 bales per week.
World demand/use for the 2026 crop year is projected at 122.9 million bales compared 121.1 last year and 119.1 in the 2024 crop year. So, demand is increasing but apparently not at a rapid enough pace. The market will keep an eye on the monthly projections and on weekly exports.
ARC/PLC Update
ARC and PLC payments for the 2025 crop year will be made in October. For 2025, producers will receive the higher of PLC or ARC, by crop by farm. The latest projected seed cotton PLC payment rate is 7.89 cents ($0.0789) per lb.
The allocation of up to 30 million additional base acres has been completed. Landowners will now have until December 11 to elect PLC or ARC for the 2026 crop year. This includes changing any earlier previous election decision.
Election for the 2027 crop year will be Nov 2 – March 15.
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