December Cotton was mixed overnight, perhaps drawing support from equity market gains in the wake of the US/EU trade announcement but then seeing some pressure as the US dollar rallied off the news. The EU deal is not specifically bullish for cotton,  as the US sells little cotton to Europe, but a more positive economic outlook is beneficial to cotton consumption in general. 

The negotiations with China will carry more weight, and there are hopes that the August 12 deadline will be extended when Treasury Secretary Bessent meets with the Chinese Vice Premier in Stockholm this week. 

The US crop looks good. Last Monday’s Crop Progress report showed 57% of the US cotton crop was rated good/excellent as of July 20, versus 53% a year ago and a five-year average of 48%. Texas was 52% G/E versus 44% a year ago and a five-year average is 34%, and we see little reason for a significant change in the outlook. 

World Weather Service did say that west Texas cotton areas still need greater rain and some additional warm weather to support the best dryland production. Other areas in Texas are seeing highly varying weather and soil conditions. The 6-10 and 8-14 day forecasts show above normal temperatures and normal to above normal rainfall across most of the US growing areas.