# Cotton and Soybeans Cotton and soybeans compete for the same fields in the US and in central India, but in Brazil most cotton is sown straight after the soybean harvest, and cottonseed meal competes with soybean meal as feed. Source page: https://www.materialinsights.org/links/cotton-and-soybeans/ [Cotton](https://www.materialinsights.org/commodities/cotton/) (commodity) and [Soybeans](https://www.materialinsights.org/commodities/soybeans/) (commodity): 4 relationships. ## How they are linked ### 1. Compete for land *Substitution · Medium · Farmers switch between them* Both are summer crops grown on similar soils, so farmers choose between them each season according to expected relative returns. - **9.6 million acres** US cotton planting intentions for 2025 (National Cotton Council survey), down 14.5% on 2024 - **about 109% and 84%** cotton and soybean kharif 2025 sowing against average area, in one Vidarbha district (Hitavada report) US growers respond to relative prices: in early 2025 the price ratios of cotton to corn and soybeans were lower than in 2024, and Southeast growers planned to move area into corn, soybeans, small grains, sorghum and peanuts. In Vidarbha the reverse happened in kharif 2025: farmers cited higher and more stable cotton prices and the soybean area fell. Sources: [National Cotton Council of America](https://ams.cotton.org/news/releases/2025/25amplantint.cfm); [The Hitavada](https://www.thehitavada.com/Encyc/2025/8/4/shift-towards-cotton-impacts-soybean-sowing-this-kharif-season.html) ### 2. Double cropping in Brazil *Geography and ownership · Medium · Soybeans first, then cotton on the same field* In Mato Grosso, Brazil's largest cotton state, most cotton is planted as a second crop after the soybean harvest, so the two crops share fields rather than compete. - **82%** of Mato Grosso's 2023/24 cotton area planted as a second crop after soybeans In Brazil the competition is between second-crop cotton and second-crop maize, not soybeans. A bigger soybean area can therefore support more cotton: Mato Grosso's cotton area rose 19.7% in 2023/24 as farmers moved second-crop land from maize to cotton. Sources: [Soybean & Corn Advisor](https://soybeansandcorn.com/articles/10044/) ### 3. Cottonseed meal for soybean meal *Substitution · Weak · Cottonseed meal can replace soybean meal* Cotton plants yield seed as well as lint, and crushing the seed gives oil and a protein meal fed to livestock, the same products that soybeans provide. - **about 41%** protein in cottonseed meal - **about 320 lb** oil extracted from a short ton of cottonseed Cottonseed meal is the most abundant plant protein feed in the US after soybean meal. Its volume is small next to soybean meal, so it follows soybean meal prices rather than setting them. Sources: [National Cottonseed Products Association (hosted by University of Guelph)](https://ovc.uoguelph.ca/ruminant_health_management/sites/default/files/files/National%20Cottonseed%20Products%20Association.pdf); [Farm Progress](https://www.farmprogress.com/cotton/valuable-products-come-from-lowly-cottonseed) ### 4. Price link: competing crop *Cost and price · Medium · Both ways* Land competition in the US and India and the shared oilseed and meal markets link the two prices over a crop year. - **0.27** monthly change correlation - **0.52** 12-month change correlation - **0.74** fitted elasticity The link is weak month to month but clearer over a year, as planting decisions shift area between the two crops. Cotton prices also follow textile demand and polyester prices, which have no bearing on soybeans. Sources: [Material Insights (World Bank, FRED, IMF data)](https://www.materialinsights.org/commodities/cotton/correlation/) ## For investors ### Key learnings 1. The cotton to soybean price ratio before planting is a useful guide to next season's US and Indian cotton area. 2. In Brazil a bigger soybean crop can support more cotton, so Brazilian cotton supply does not fall when soybeans gain. 3. Cottonseed oil and meal give cotton a small link to oilseed markets, but soybean meal sets the price. ### What to track - **Cotton to soybean new-crop price ratio**: A falling ratio signals less cotton area next season (Weekly · ICE, CBOT) - **USDA Prospective Plantings and Acreage**: Shows actual US area shifts between the crops (March and June · USDA NASS) - **Brazil second-crop cotton area**: Indicates Brazilian supply growth (Monthly · CONAB) ## For policymakers ### Key learnings 1. In India, relative prices and price stability influence whether Vidarbha farmers plant cotton or soybean, so minimum support prices for both crops shape the area split. 2. Area moving from soybean to cotton lowers domestic oilseed output, so cotton support and oilseed policy need to be planned together. 3. Cottonseed oil is a domestic edible oil source, so cotton area also counts in oilseed planning. ### What to track - **Kharif sowing progress by crop**: Shows area moving between cotton and soybean (Weekly in season · Ministry of Agriculture and Farmers Welfare) - **Cotton and soybean MSP and market prices**: Relative returns that drive sowing choices (Seasonal · CACP, Agmarknet) ## India India is a major producer of both crops, and in central India they compete for the same fields; in kharif 2025 one Vidarbha district saw cotton sown on about 109% of its average area while soybean fell to about 84%. ## Sources 1. [Price correlation, Material Insights](https://www.materialinsights.org/commodities/cotton/correlation/), Material Insights (World Bank, FRED, IMF data) 2. [NCC acreage survey: 2025 planting intentions](https://ams.cotton.org/news/releases/2025/25amplantint.cfm), National Cotton Council of America (2025) 3. [Shift towards cotton impacts soybean sowing this kharif season](https://www.thehitavada.com/Encyc/2025/8/4/shift-towards-cotton-impacts-soybean-sowing-this-kharif-season.html), The Hitavada (2025) 4. [Mato Grosso farmers increased 2023/24 cotton acreage by 19.7%](https://soybeansandcorn.com/articles/10044/), Soybean & Corn Advisor (2024) 5. [Cottonseed feed products guide](https://ovc.uoguelph.ca/ruminant_health_management/sites/default/files/files/National%20Cottonseed%20Products%20Association.pdf), National Cottonseed Products Association (hosted by University of Guelph) 6. [Valuable products come from lowly cottonseed](https://www.farmprogress.com/cotton/valuable-products-come-from-lowly-cottonseed), Farm Progress (2007)