内外价差开始收敛，内外棉价偏强运行

1. Report Industry Investment Rating - The investment view on the cotton industry is "oscillating." In the short - term, cotton prices are expected to be oscillating and slightly bullish; in the medium - to - long - term, the upside space is limited, and there is a need to be vigilant against correction risks [3]. 2. Core View of the Report - The core view is that the price difference between domestic and international cotton is starting to converge, and both domestic and international cotton prices are running strongly. The supply of cotton is expected to shrink, with short - term supply remaining tight. Demand has a complex situation, with domestic demand gradually recovering but overall demand repair affected by weak external demand. The overall inventory is at a relatively low level in recent years, and various factors such as basis, profit, valuation, and macro - policies all have a certain impact on cotton prices [3]. 3. Summary According to the Directory Part One: Main Views and Strategy Overview - Supply: Internationally, the production of the US and Brazil has been raised, but there are still short - term supply disturbances (delayed new cotton listing in India and farmers' reluctance to sell). Domestically, the purchase of Xinjiang cottonseed is almost over, ginning is nearing completion, old - crop cotton inventory is at a low level, combined with the expected structural reduction of Xinjiang's cotton planting area in the 26/27 season, and the supply contraction expectation is clear, with short - term supply remaining tight [3]. - Demand: Globally, the consumption in the 2025/26 season has been slightly reduced, and there is pressure on external demand as the demand in major consumer countries such as Pakistan and India has declined. Domestically, the operating rate of downstream textile mills has rebounded to 64.6% (a 6% month - on - month increase), orders have improved, domestic demand is gradually recovering, but weak external demand drags down the overall demand repair [3]. - Inventory: Globally, the ending inventory in the 2025/26 season has been raised to 70.39 million bales, and the inventory - to - consumption ratio has risen to 64.4%. Domestically, the commercial inventory has decreased slightly year - on - year, Xinjiang cotton has been transferred to the inland, and port inventory has increased. The overall inventory is at a low level in recent years [3]. - Basis/Spread: (1) The basis of Xinjiang spot cotton has narrowed compared with the previous period. (2) This week, the far - month contracts of Zhengzhou cotton have strengthened, showing a structure of near - term weakness and far - term strength. The inversion of the price difference between domestic and international cotton has eased, and the price advantage of imported cotton has weakened [3]. - Profit: For cotton farmers, the planting profit has recovered but is still below the cost line. For textile mills, raw material costs are high, cotton yarn prices are rising steadily, but profits are still thin. Some enterprises are at the break - even point, and their purchasing willingness is cautious [3]. - Valuation: Domestically, the price of Zhengzhou cotton is close to the planting cost line and is supported by tight supply. Internationally, the far - month contracts of ICE cotton have reached a new high this year, and the valuation is supported by demand expectations and supply disturbances, being at a neutral level in the past four years [3]. - Macro and Policy: Domestically, pro - growth policies boost domestic demand, and additional import quotas are issued to adjust domestic supply and demand. Internationally, under the Fed's interest - rate cut cycle, the global monetary policy tends to be loose, the risk appetite for commodities has increased, and geopolitical disturbances intensify market volatility, indirectly supporting cotton prices [3]. - Investment View: Short - term: Constrained by foreign imports, tight domestic supply, and gradually improving downstream demand, cotton prices are oscillating and slightly bullish. Medium - to - long - term: The upside space is limited, and there is a need to be vigilant against correction risks [3]. - Trading Strategy: For both unilateral and arbitrage trading, the current recommendation is to wait and see. The risks to be concerned about include domestic regulatory policies, Sino - US trade policies, and downstream consumption [3]. Part Two: Cotton Fundamental Data - US Textile and Apparel Imports: There are multiple charts showing the monthly import values of US clothing and accessories from various countries such as the world, Bangladesh, Pakistan, India, China, and Vietnam from 2020 - 2025, indicating the reconstruction of the US textile and apparel import pattern [5][6]. - EU Textile and Apparel Imports: There are multiple charts presenting the monthly import values of EU clothing and accessories from countries like Vietnam, the US, China, and Bangladesh from 2020 - 2025 [13][17]. - Domestic Cotton Processing and Sales Progress: Charts show the national cotton processing progress, cumulative inspection volume, picking progress, and delivery progress from 2020 - 2025 [20][22]. - Import Situation: The import of cotton is restricted, while the import of cotton yarn has increased. There are charts depicting the monthly and cumulative import volumes of domestic cotton and cotton yarn from 2018 - 2025 [23][24]. - Upstream Inventory: The upstream inventory shows a seasonal increase. Charts display the national cotton bonded - area commercial inventory, industrial inventory, commercial inventory, and Xinjiang cotton commercial inventory from the 20/21 to 25/26 seasons [29][33]. - Mid - stream Mill Load: The load of pure - cotton yarn mills and all - cotton grey fabric mills is presented in charts from 2018 - 2026 [38]. - Mid - stream Mill Profit: The overall profitability of spinning mills has narrowed, and Xinjiang mills are at a break - even point. Charts show the spinning immediate profit and yarn - cotton spot price difference from 2017 - 2026 [40][41]. - Domestic and International Consumption and Export: There are multiple charts showing the domestic cumulative and monthly retail sales of clothing, footwear, and textiles, as well as China's cumulative and monthly export values of clothing and textile yarn and fabrics from 2019 - 2025 [47][53]. - US Cotton Market: Charts display the annual processing volume of the US cotton market, the weekly signing and shipping volumes of US upland cotton in the current and next market seasons from 2020 - 2026, and the data related to China's signing and shipping of US upland cotton [62][64]. - International Cotton Exports: Charts show the export volumes of Brazilian cotton and its exports to China, as well as the export volume and value of Australian cotton to China from 2020 - 2025 [77][81]. Part Three: Cotton Capital - related Data - Zhengzhou Cotton Basis and Spread: Charts present the basis of Zhengzhou cotton's 05 and 09 contracts, the spread between 09 - 01 and 05 - 09 contracts from 2021 - 2026 [85][86]. - Zhengzhou Cotton Position: Charts show the position volumes of Zhengzhou cotton's 05 and 09 contracts from the 20/21 to 25/26 seasons [93][94]. - US Cotton Fund Position: Charts display the net - long position volumes of managed funds in US cotton futures and the combined net - long position volumes of futures and options, as well as their long - position ratios from 2018 - 2026 [101][103]. - US Cotton Month - to - Month Spread: The chart shows the 03 - 05 month - to - month spread of US cotton from 2021 - 2026 [106].