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Report Industry Investment Rating No information provided in the content. Core Viewpoints of the Report - Short - term, domestic cotton supply is tightening. With the arrival of the peak season and the possibility of a scramble for new cotton, Zhengzhou cotton futures may show a volatile and upward trend before the large - scale listing of new cotton. Medium - term, due to strong expectations of a bumper harvest in the new year, the futures market will face significant pressure during the centralized listing period. Attention should be paid to the actual demand during the peak season. If the peak - season demand fails to meet expectations, Zhengzhou cotton may still decline. Long - term, cotton prices are expected to be positive. After the seasonal pressure eases, it is advisable to look for opportunities to go long on dips [4]. Summary According to the Directory Tariff Policy Impact Analysis - On May 12, China and the US issued a joint statement in Geneva, canceling 91% of the mutually imposed tariffs. However, the overall tariff level on Chinese textiles in the US remains high, and there is still an additional 25% tariff on US cotton imported by China. The extension of the tariff truce for 90 days has a limited positive impact on export trade. The US - India trade friction also affects the cotton market. India's temporary cancellation of cotton import tariffs has limited positive effects due to the short time period [9][10][14]. International Cotton Market Supply - Demand Analysis Global - In August, the USDA significantly reduced the global cotton production and ending stocks for the 25/26 season in its supply - demand report, changing the supply - demand situation from loose to tight. However, this adjustment is controversial as it may not fully reflect the production potential of some countries and lacks strong support on the demand side [15]. United States - The NASS's August report shows a reduction in cotton planting and harvest areas in the US, with the 25/26 season's production dropping to 288 tons. Exports and ending stocks are also down, improving the supply - demand outlook. But some market participants think the adjustment may be too radical, and the reduction in supply needs further observation [18][19]. Brazil - The USDA predicts that Brazil's new - season cotton production will increase by 27 tons to 397 tons, with export expectations exceeding 3 million tons. Brazil has replaced the US as the world's largest cotton exporter, and its increasing production will further pressure US cotton [27][29]. India - For the 24/25 season, different institutions have different estimates of India's cotton production. For the 25/26 season, the USDA reduced India's consumption and increased ending stocks. Currently, India's new - cotton sowing progress is slower than usual, and there are uncertainties in the final planting area and output [32]. Domestic Cotton Market Supply - Demand Analysis USDA - In August, the USDA increased China's new - season cotton production and consumption while reducing imports and ending stocks. However, it may still underestimate China's cotton production [35]. BCO - The Cotton Information Network continued to lower China's ending stocks. For the 24/25 season, production remained stable, imports decreased, and consumption increased. For the 25/26 season, production increased, imports decreased, and consumption remained stable, with ending stocks also decreasing [38]. Production - Domestic institutions' estimates of China's total cotton production are around 6.9 million tons, but the market expects a higher output, especially in Xinjiang, where a bumper harvest is likely [41]. Import - Due to limited additional import quotas and high domestic production, China's cotton imports have been low. The recent issuance of 200,000 tons of sliding - scale duty import quotas is unlikely to ease the short - term supply shortage in Xinjiang [44]. Inventory - China's domestic cotton commercial inventory has been decreasing rapidly and is at a historically low level, which strongly supports domestic cotton prices [46]. Textile Industry Chain - Since August, the demand side has improved marginally, but the improvement is limited. The peak - season demand may not be strong. Yarn mills' sales have improved slightly, but profits are still poor. Weaving mills' orders have increased slightly, and their raw - material procurement enthusiasm is limited [52]. Future Cotton Market Outlook ICE US Cotton - The new US tariffs are not conducive to global textile trade. India's temporary cancellation of cotton import tariffs has limited positive effects. The USDA's adjustment of the supply - demand situation is beneficial to cotton prices, but the reduction in production needs further verification. In the short term, ICE US cotton may be trapped in the 65 - 70 cent trading range. In the medium - to long - term, attention should be paid to the realization of the production - reduction expectation [60]. Domestic Zhengzhou Cotton - The "anti - involution" in China has ended, and the tariff truce has been extended for 90 days, but macro risks remain. The short - term supply shortage persists, and the peak - season demand improvement provides support for cotton prices. However, the large - scale listing of new cotton may bring hedging pressure. In the medium - to long - term, attention should be paid to tariff policies and the realization of the domestic production - increase expectation [61].