U.S. Cotton Crop Shrinks, Driving Prices Higher Amid Supply Losses
The U.S. cotton crop is experiencing a significant contraction, leading to an 18-month high in cotton prices. This is primarily due to record heat in West Texas, which has raised concerns about cotton yields and abandonment. Declining crop conditions indicate that the Texas crop may underperform, with only 18% rated good-to-excellent and 49% rated poor-to-very-poor. The USDA forecasts a 5% year-over-year decline in the U.S. cotton crop to 13.2 million 480-pound bales, with yields dropping 9% year-over-year to 776 pounds per acre. Similar supply losses are affecting other agricultural commodities, with U.S. rice acreage falling 25% year-over-year, leading to the smallest harvest since 1990. Sugar prices are also climbing due to tightening production prospects, including the lowest sugar beet plantings since 1950 and pest infestations affecting sugarcane growers in Florida.
