It is never too early to begin planning for next year’s crop marketing. Longer run price outcomes for the 2027 crop will depend on expectations of supply and demand. The first major supply-related question is how much U.S. cotton acreage will be planted. The price of competing crops, relative to cotton prices, is an important consideration to the level of planted acreage. The chart below shows a fairly strong relationship between the level of U.S. upland and pima cotton planted (as measured on June 30) and the ratio of December CBOT corn futures and ICE cotton futures during the first quarter of the year. The higher the ratio, the less cotton is planted, all other things equal. Of course, there are other important competing crops as well: sorghum, soybeans, peanuts, and perhaps wheat. And there are other non-price influences, including how dry it is in Texas, the insurance base price, fixed cost influences, and the psychological influence of the preceding growing season. But the price ratio of corn to cotton appears to capture a lot of these other influences in explaining variations in/ cotton plantings.
What does the above chart imply for 2027? As of August 11, the Dec’27 CBOT corn/Dec’27 ICE cotton price ratio is historically associated with about 11 million planted acres of all cotton. This price ratio approach to forecasting planted acreage will eventually be replaced by grower survey results like the NCC’s (circa early February, 2027) and USDA’s Prospective Plantings report (circa March 31, 2027) and Acreage report (circa June 30, 2027), and later USDA FSA certified acres data in the summer and fall of 2027.
The typical planting dates vary across Texas from south (earliest) to north, as illustrated by the official insurance final planting dates in the map below. More description and details about regional late planting periods can be found here.
Whatever is planted could possibly have good moisture conditions. NOAA’s Climate Prediction Center describes a current El Niño warning condition that is forecasted to strengthen going into the Northern Hemisphere winter. The chart below shows the El Niño temperature anomaly lasting until April. This implies a possibility of good planting moisture, and possibly good implications for emergence and low abandonment. This, in turn, could contribute to a relatively healthy supply.
