Shurley: No Price Bump Seen from Lower Cotton Acres
March 3, 2025 U.S. cotton acres planted are expected to drop 14.5% this year according to the National Cotton Council’s survey. If realized, this would be the lowest acreage since 2015 and the sixth lowest going back all the way to 1975. Yet last week (Feb. 28), cotton prices (nearby old crop May 2025 futures) dropped to 65 cents – the lowest in roughly five years. New crop December 2025 stands at roughly 68 cents.
At last week’s USDA Outlook Forum, cotton acres for this year were pegged at 10 million acres compared to the NCC 9.56 million. With either number, if we assume average abandonment and yield, we get a 2025 crop not much different (slightly smaller to just a little larger) than last year even with this reduction in acres planted. Perhaps this is one reason why the market has yet to show any upward price response to the prospect of lower acres.
The decline in cotton acres likely means an increase in corn, soybeans, grain sorghum, and peanut acres. Or perhaps it could also mean some acres may be left out of production this year. USDA’s Prospective Plantings report will be out on March 31.
Prices have been on a long slide since October. There was a recovery after the big drop back in November. Prices had shown a nice recovery in the past couple of weeks but moved weaker this past week and dropped all the way to 65 cents.
Export sales and shipments have been stronger over the past month – taken as a positive sign by the market and perhaps signaling that demand is improving. But, both sales and shipments were down sharply in the latest weekly report – perhaps a reason for the price decline this week.
The February monthly USDA supply/demand report was little changed from January. World demand/use was increased slightly, production in China was increased 1 million bales, and imports for China reduced 700,000 bales. U.S. exports for the 2024 crop marketing year were unchanged at 11 million bales. Brazil production was increased 100,000 bales but exports were unchanged.
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