Planted area surveys in China and the US both see growth

USDA's Planted Acres report issued on June 30showed that U.S. cotton growers have planted an estimated 10.1 million acres of upland and Pima cotton in 2025–down 10% from 2024's final acreage figures. Upland area is estimated at 9.95 million acres, down 9% from last year. American Pima plantings are estimated at 171,000 acres, down 17% from 2024. The report reflects a 2.3% acreage increase from USDA's Prospective Plantings estimate of 9.87 million acres on March 31. The increase is mainly due to a 200,000 acres increase of upland cotton in Texas.

Currently, U.S. cotton planting is near the completion. The good-to-excellent ratio of cotton crops is recovering gradually from low level and the drought in the major cotton producing areas is in the five-year average. By June 29, about 95% U.S. cotton crops have been planted, down 2 percentage point from the same period of 2024, down 3 percentage point from five-year average, according to USDA. The good-to-excellent ratio of crops is 51%, up 1 percentage point from last year and up 4 percentage point from five-year average. Meanwhile, the drought in major U.S. cotton-growing regions and Texas are at the five-year average level, maintaining a slight downward trend on a weekly basis. In recent days, precipitation in major producing areas has increased. Except for Texas and Arizona, the drought in most producing areas has dropped to 0.

The Chinese sowing area has also increased significantly, and the sowing area in Xinjiang exceeds the intended planting area. According to the June survey by the China National Cotton Information Center, the national cotton sowing area in 2025 reached 45.803 million mu, an increase of 2.707 million mu (6.3%) year on year. The main increase came from Xinjiang, which was 2.116 million mu higher than the intended planting report in March. According to the May report of China Cotton Association, the crop conditions showed a year-on-year decline, with relatively light insect infestations in most cotton fields. Specifically: in most cotton-growing areas of Xinjiang, sufficient heat and suitable soil moisture sustained crop growth. 80.5% of respondents rated crop conditions as "good" or "average", a year-on-year decrease of 11%, while the probability of plant diseases and insect pests declined compared to the same period last year. The Yellow River Basin experienced an overall arid climate with persistently low precipitation. 85.4% of respondents considered crop conditions to be "good" or "average", showing a year-on-year decline, while the probability of plant diseases and insect pests remained unchanged. Despite low precipitation, the Yangtze River Basin saw cotton crop grow faster than last year with overall robust vigor. 77.4% of surveyed households evaluated crop conditions as "good" or "average", and the probability of plant diseases and insect pests was relatively low.

Additionally, the latest production forecast data for the 2024/25 season updated by Brazil's National Supply Company (CONAB) in June shows that Brazil's total cotton output is expected to be 3.913 million tons, an increase of 8,000 tons from the previous month. The planting area has been revised down to 2.0815 million hectares, while the yield has been revised up to 125.3kg/mu.

That is to say, following Brazil's upward adjustment of its cotton production forecast for the new season, the sowing areas in China and the United States have also been increased compared with the intended planting areas, expanding expectations of loose supply. From a macro perspective, as the three-month tariff exemption period expires on July 9, the Trump administration has stated that it will not consider extending the deadline for tariff negotiations. U.S. Treasury Secretary Bessent warned that although countries are negotiating in good faith, the United States may still resume imposing substantial tariffs on July 9, with the highest tariff rate reaching 50%. When U.S. trade pressure is escalating, Canada has chosen to concede by canceling the digital services tax originally scheduled to take effect this week and resuming trade negotiations with the United States.

The uncertainty of trade negotiations will gradually become clear in the coming week. The results of the trade negotiations between the United States and most countries will surely become a bargaining-chip for the subsequent Sino-US negotiations. Although the fundamental situation of cotton is tending to be loose, it is still necessary to cautiously view the fluctuations in the short term, subject to the conclusion of the tariff negotiations.