By Jamie Martin
Cotton prices remain weak and stable as the market moves into 2026. Nearby futures and U.S. spot prices continue to trade around $0.63 cents/lb. Although new-crop December 2026 futures carry a premium, the market views this as expected supply tightening rather than a recovery in demand.
Global supply conditions continue to weigh on prices. USDA projections show production slightly exceeding mill use during the 2025/26 marketing year, increasing world-ending stocks. Large inventories reduce urgency among buyers and slow price gains. In the United States, ending stocks are also high, creating one of the strongest stocks-to-use ratios seen since the pandemic period.
Exporter production trends show different directions. U.S. output is projected lower because of weaker yields, while Australia faces a major decline due to area reductions and dry weather conditions. Brazil remains a key factor because production estimates differ between reporting agencies. Since Brazil is a major exporter, final crop size could influence world pricing and competition.
Trade flows are adjusting as buyers shift origins. U.S. cotton has gained opportunities in markets such as Vietnam, while China appears to increase purchases from Australia. Small trade adjustments can affect export bids and overall market sentiment.
Acreage expectations do not suggest a strong bullish signal. U.S. cotton area is projected to decline modestly in 2026 as competing crops offer better returns. Relative price signals currently favor alternatives such as corn, limiting cotton expansion.
The weather could still change its outlook. Forecasts suggest La Niña may weaken toward neutral conditions, but drought concerns remain in parts of Texas. If rainfall remains limited, abandonment rates could rise and reduce supply later in the season.
Growers are encouraged to stay flexible and manage risks carefully. Using price rallies to secure portions of expected production while monitoring export demand and weather conditions may help protect profitability in a market that remains uncertain.
Categories: National