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The USDA’s August 2025/26 U.S. cotton balance sheet shows lower production, exports, and stocks compared to last month, with planted area down 8% and harvested area down 15% due to dryness in the Southwest. Higher abandonment rates lifted yields but still cut production to 13.2 million bales. Exports fell by 500,000 bales, pushing ending stocks down to 3.6 million bales. The stocks-to-use ratio dropped to 26.3%, raising the season-average upland price to 64 cents per pound. Globally, production, consumption, trade, and stocks are all reduced, led by declines in the U.S., Sudan, Uzbekistan, and Mali, partly offset by higher output in China.

Key Highlights

* US cotton planted area down 8%, harvested area down 15%.

* 2025/26 US production cut to 13.2 million bales.

* Exports reduced by 500,000 bales due to smaller crop.

* Ending stocks drop to 3.6 million bales, pushing prices higher.

* Global production and trade fall, despite larger Chinese crop.

Cotton prices in the U.S. are expected to firm as the USDA’s August 2025/26 outlook reports a notable drop in production and exports. The season-average upland price forecast has been raised to 64 cents per pound, reflecting tighter domestic supplies.

According to the USDA, planted cotton area has fallen 8% to 9.3 million acres, while harvested area has plunged 15% to 7.4 million acres. Dryness in the Southwest has pushed the national abandonment rate to 21%, up from 14% last month. Although the national average yield is up 6% to 862 pounds per harvested acre—due to fewer low-yielding dryland acres being harvested—the total production forecast is still down to 13.2 million bales, 1.4 million below July’s estimate.

Exports are projected to decline by 500,000 bales, in line with the smaller crop. Beginning stocks for 2025/26 have also been trimmed by 100,000 bales, leading to ending stocks of 3.6 million bales—a million bales lower than last month’s forecast. The stocks-to-use ratio has tightened to 26.3%, adding upward pressure to prices.

Globally, the cotton balance sheet also reflects contraction. Production, consumption, trade, and stocks are all lowered from last month. Reductions in the U.S., Sudan, Uzbekistan, and Mali outweigh a higher forecast for China. Consumption has been cut slightly due to weaker mill use in India, Bangladesh, and Turkey, partially offset by gains in China. World trade is expected to shrink by 1.1 million bales, and ending stocks are set to fall by over 3.4 million bales.

In conclusion, tighter U.S. and global supplies, coupled with shrinking stocks, are likely to keep cotton prices supported in the coming months despite modest yield gains.

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