Recent U.S. Drought Monitor data show 77% of cotton production area in moderate or worse drought as of late September 2026, driven by prolonged heat and dryness across Texas and Oklahoma—the Southwest region that accounts for a large share of U.S. output. This has contributed to sharply reduced crop-condition ratings, with only about 36% rated good-to-excellent nationally. NOAA’s October outlook favors drought improvement or removal across parts of the Southern Plains and Southeast, though model consensus and any late-season rainfall will determine whether the percentage for the week of October 6 falls into lower bins or remains elevated above 55%. The next USDM release and harvest-progress reports represent the key near-term data points traders are monitoring.