December Cotton has is higher this morning on optimism on reports that the US government shutdown may be nearing an end. Equity markets are higher and the dollar is lower, and both moves are supportive to cotton. Soybeans are higher as well, which lends support to cotton.
Any optimism about China buying US soybeans seems to lends some hope that they will buy US cotton as well. World Weather Inc. says US harvest conditions have been mostly good recently. Cold temperatures in the southern Plains, Delta and southeastern states will end the growing season for many areas. Precipitation will remain limited this week favoring more fieldwork.
We haven’t had a Crop Progress report in more than a month. The five year average has the crop 65% harvested by now. USDA Crop Production and supply/demand reports will be released on Thursday. This will be the first update on the crop since the shutdown. As of September 28, 47% of the US crop was rated good/excellent versus 32% a year prior and a five year average of 40%, and Texas was 41% G/E versus 26% on average. The dry conditions in late summer in the Delta and Southeast may pull the total US production numbers down a bit.
Also prior to the shutdown, weekly US export sales had reached 36% of the USDA forecast for the 2025/26 marketing year versus a five-year average of 53% for that point in the season. This discrepancy could encourage the USDA to lower its export forecast for 2025/26, but they may also choose to wait until the export sales data is updated.
Source: ADM