Welcome to this week's edition of the Weekly Cotton Market Update, covering key developments in the cotton industry from February 15-21, 2026. As U.S. producers grapple with persistent economic headwinds, acreage intentions signal contraction, while global trade deals offer glimmers of demand support. Prices hovered in the low-60s cents per pound amid volatility, with futures around 64.4 cents by week's end. Let's dive in.
U.S. Cotton Spotlight: Acreage Declines and Economic Pressures Dominate
The U.S. cotton sector faced another tough week, with planting intentions reflecting ongoing challenges from low prices, high costs, and competition from alternative crops. Here's a breakdown:
Planting Intentions Signal Further Contraction
- The National Cotton Council's (NCC) 45th Annual Early Season Planting Intentions Survey, released February 12 but discussed widely this week, projects U.S. cotton acres at 9.0 million for 2026—a 3.2% drop from 2025. Upland cotton intentions fell 3.4% to 8.8 million acres, while extra-long staple (ELS) rose 14% to 161,000 acres.
- Regional shifts were stark: The Mid-South saw a nearly 21% decline (20.6% per Farm Progress), driven by better returns from corn and soybeans. Southeast acres dipped modestly, while the Southwest held steady.
- This follows a 17% acreage reduction in 2025, marking the second consecutive year of shrinkage and underscoring four years of unfavorable market returns. Economists warn this "perfect storm" of sluggish demand and high inputs could push more growers out.
At the USDA's Outlook Forum on February 19, projections were slightly more optimistic: 9.4 million planted acres, 19% abandonment, 13.6 million bales of production, and 4.2 million bales of ending stocks for 2026/27. This suggests stability but highlights weather risks, with last year's 700,000 prevented plantings complicating year-over-year comparisons.
Market Dynamics and Price Volatility
- Cotton prices tested 65 cents per pound early in the week—the highest since November—before slipping amid weak exports and demand. May futures faded after an oversold rally, closing around 64.4 cents. [post:31]
- USDA's weekly export sales for the week ending February 5 (reported mid-week) showed 231,000 running bales of Upland cotton for 2025/26—down 8% week-over-week but still supportive at this stage. Net sales were 23% below the four-week average, yet mill engagement remains steady.
- Overall, 2025 was challenging with prices below production costs; growers face "hang on or get out" decisions, potentially risking the industry's future alongside rice. Georgia producers are trimming costs and boosting yields to protect margins amid low prices. [post:30]
Trade Deals Provide Demand Boost
- Key wins emerged from U.S. trade negotiations: A U.S.-India framework (early February, but impacts discussed this week) lowers India's tariffs on U.S. ag imports, while the U.S. cuts textile/apparel tariffs from India to 18% (from 50%). This could enhance U.S. cotton exports.
- Similarly, a U.S.-Bangladesh deal exempts certain Bangladeshi textiles from reciprocal tariffs in exchange for $3.5 billion in U.S. ag purchases, including cotton—a major victory for U.S. fiber. [post:28]
- USDA revisions boosted China and India imports by 200,000 bales each (to 5.6M and 3.2M), while Pakistan and Turkey saw cuts. Global trade held at 43.7 million bales, with U.S. exports down 200,000 to 12.0 million.
Industry Insights and Challenges
- At the NCC's annual meeting in San Antonio (wrapped up early week), President and CEO Gary Adams highlighted persistent pressures but noted potential price support from declining stocks. World consumption is up 1% to 120 million bales in 2026, with production at 114.1 million, drawing down ending stocks to 69.8 million (lowest since 2016 outside China).
- Farmers are navigating "dynamic" conditions, with opportunities in exports and new varieties, but warnings of a breaking point loom. [post:11] Better Cotton Initiative (BCI) opened U.S. producer enrollment for 2026-27 until May 15.
- Macro factors like a strong dollar and 3.1% global growth (IMF) cap upside, with Brazil's competitive exports adding pressure.
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International Cotton Highlights: Trade Talks and Regional Pressures
Shifting to global news, which made up about 25% of this week's chatter, key themes included trade collaborations and market softness in key regions.
Asia and Middle East Developments
- Uzbekistan and Türkiye's DoCotton Group met February 21 to discuss textile industry growth, focusing on joint ventures and tech transfers. This could boost Central Asian production amid global yield slowdowns.
- In South India, cotton yarn markets remained under pressure with stable prices in Mumbai and Tiruppur, but weak domestic/export demand, liquidity issues, and sluggish fabric offtake resisted rate cuts. [post:36] Last year's 30,000 acres damaged in Punjab highlighted vulnerabilities, with mills pushing for lower ELS import duties. [post:35]
- Global organic cotton production is set for growth, driven by India and Turkey (48% estimated rise in 2020/21, with momentum continuing). Import talks could further squeeze margins. [post:37]
Africa and Broader Outlook
- Kenya's cotton revival gained traction: Lamu farmers sold 3.5 million kg worth KES 335 million last season at KES 72/kg for Grade A. [post:38] New ginneries in Mpeketoni and Kwale, plus Bt cotton adoption, promise profits up to KES 180,000/acre.
- Worldwide, cotton faces a "slow yield decade," with modest production growth constraining consumption. [post:24] IMF's 3.1% growth forecast and geopolitical risks weigh on demand.
Outlook: Cautious Optimism Amid Tightening Supply
As we wrap up February 15-21, the cotton market shows resilience through trade wins, but U.S. growers' acreage cuts and global demand uncertainties loom large. Watch for USDA's next WASDE and planting progress. For more, check NCC's full survey or Cotton Inc.'s economic letter. Stay tuned—next update February 28.
