DTN Closing Cotton            07/10 13:36

   Cotton Climbs Despite Larger Crop Forecast

   Despite a higher projected 2026 U.S. crop, along with slightly increased 
world carryout, the cotton market finished slightly higher Friday.

Keith Brown
DTN Contributing Cotton Analyst

   Despite a higher projected 2026 U.S. crop, along with slightly increased 
world carryout, the cotton market finished slightly higher Friday. Traders will 
look to this afternoon's CFTC update for further influences.

   From USDA's website we note:

   "The July outlook for 2026/27 U.S. cotton forecasts higher production and 
ending stocks, with beginning stocks, consumption, imports and exports 
unchanged from last month. U.S. all-cotton production is raised 400,000 bales 
to 13.7 million as planted area is estimated at 9.85 million acres based on the 
June Acreage report, up 2 percent from last month. Harvested area also is 
projected 2% higher at 7.54 million acres assuming a 10-year average 
abandonment rate for all regions. The national average yield is raised 6 pounds 
to 872 pounds per harvested acre, reflecting the increased area in the 
Southeast and Delta and lower area in the Southwest in the June Acreage report. 
With higher production and no changes to offtake, ending stocks are raised 
400,000 bales to 4.1 million for an ending stocks-to-use ratio of 29.5 percent. 
The projected season-average price is unchanged at 73 cents per pound. There 
are no changes to supply and demand categories in the 2025/26 U.S. cotton 
balance sheet this month. The 2025/26 season-average farm price is lowered half 
a cent to 62.5 cents per pound.

   "World cotton supply for 2026/27 is raised 300,000 bales as higher 
production more than offsets a reduction in beginning stocks. The forecast for 
global cotton production raised 1.2 million bales to 117.3 million with bigger 
crops expected for Brazil, the United States, Turkey, and Central Asia.

   "Consumption is raised slightly to 122.0 million bales with an increase in 
Vietnam mill use slightly offset by a small reduction for Azerbaijan. Trade is 
virtually unchanged from last month at 43.3 million bales. With the increase in 
global supplies exceeding the growth in consumption, ending stocks for 2026/27 
are increased slightly to 71.2 million bales, resulting in a stocks-to-use 
ratio of 58.4 percent. For 2025/26, world production is lowered by 750,000 
bales following a likely reduction for Brazil. Global consumption is reduced 
modestly to 120.0 million bales as a reduction for Pakistan more than offsets 
an increase for Vietnam, with small changes elsewhere. Exports are raised 1 
percent, primarily on higher shipments by Brazil, and small changes for a few 
other countries. Ending stocks are reduced by about 900,000 bales, mostly due 
to the smaller Brazilian crop, lowering the stocks-to-use ratio to 63.1 
percent."

   Also, Friday at 3:30 p.m., the CFTC will update its Commitment of Traders 
data. Last week, the funds bought 6,400 positions, shrinking their net-long 
carry to 31,985 contracts.

   The most current U.S. Drought Monitor now shows that 55% of the U.S. cotton 
area is in drought conditions. That reading compares to the previous 56% versus 
its top peak of 98% drought earlier in the year. With that, the 6- to 10-day 
weather forecast (July 15-19) shows near-normal to above-normal temperatures 
for West Texas, while the Delta and the Southeast will experience above-normal 
to much above-normal readings. Rainwise, much of the breadth of the U.S. Cotton 
Belt should see slightly above-normal chances for precipitation opportunities.

   Crude oil was lower Friday, but was on track for weekly gains as renewed 
U.S.-Iran fighting disrupted shipping in the Strait of Hormuz, stoking 
concerns over supply disruptions. President Trump said Friday that the United 
States and Iran have agreed to continue peace talks, but emphasized that "in no 
uncertain terms, that the ceasefire is over."

   For Friday, December closed at 81.54 cents, up 93 points; March 2027 
finished at 82.91 cents, plus 94 points; and July 2027 settled 83.12 cents, up 
78 points. Friday's estimated volume was 52,587 contracts.

   Keith Brown can be reached at commodityconsults@gmail.com




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