Shurley: USDA June Numbers Neutral – Not Good but Not Bad
June 17, 2025 The USDA monthly supply/demand estimates for June do not contain enough good news to support higher prices. But also, there’s not enough negative news to call for price to move lower. So, prices (Dec. ‘25 futures) are likely to remain mostly in the 67 to 71 cents range – just as they have for the past six months.
The Good
- U.S. exports projected for the 2024 crop marketing year ending July 31 were raised 400,000 bales to 11.5 million bales.
- World production for the 2024 crop was lowered 1.14 million bales, accounted for mostly by India (lowered one million bales).
- World production for the 2025 crop was reduced 820,000 bales from the May estimate, accounted for by reductions for the U.S., India, and Pakistan.
- U.S. exports for the 2025 crop year remain at 12.5 million bales – unchanged from May. If realized, this is a one million bale increase from the 2024 crop year.
The Bad
- Production for China for 2025 was raised 100,000 bales from the May estimate, while 2025 crop year imports for China were lowered 50,000 bales.
- World demand/Use for the 2025 crop year was lowered 320,000 bales from the May estimate, accounted for by reductions for India, Turkey, and Bangladesh.
Now, a big unknown in all of this is what impact does the U.S. crop have on the market? The U.S. is now the fourth largest producer and 4+ million bales behind Brazil. We are roughly two million bales behind Brazil in exports. How much of a “mover” is the U.S. in determining World and U.S. price movement and price direction? Maybe all we can conclude is that the U.S. role is still important but has been diminished.
It’s early. But in USDA’s June numbers, the U.S. crop is projected at 14.0 million bales. That’s 500,000 bales less than the May estimate. Harvested acres and expected yield were both revised down.
In the USDA March Prospective Plantings report, farmers said they intended to plant 9.87 million acres this year – down 12% from last year. I believe that number could end up being too high and be closer to 9.5 million acres or even less. It seems possible that continued low cotton prices since March may have dampened intentions.
If acreage declines further, unknown is whether or not that matters enough to push prices to the next tier of 72 to 75 cents. The first estimate of actual acres planted will be the USDA Acreage report on June 30.
Thus far, prices have not been responsive to fewer U.S. acres because growing conditions and planting progress have been mostly good. Only 6% of cotton production is currently within a drought area.
As of June 16, 85% of the U.S. crop was planted, compared to 90% normal at this date. In terms of condition, 19% of the crop was rated poor or very poor condition and 48% was rated good or excellent.
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