Core Viewpoint - Domestic cotton prices are expected to experience fluctuations and rise in the fourth quarter of 2025, driven by cost support, improved demand expectations, and reduced supply pressure [3][17]. Group 1: Price Trends - In the fourth quarter, the average price of China's 3128B grade cotton was 14,570.51 yuan/ton, a decrease of 0.46% from the third quarter but an increase of 0.03% compared to the fourth quarter of 2024 [4][18]. - The highest price reached 15,077 yuan/ton at the end of December, while the lowest was 14,188 yuan/ton at the beginning of October, with a price difference of 889 yuan/ton [4][18]. Group 2: Supply and Demand Dynamics - The sales progress of new cotton is rapid, with cotton spinning enterprises showing strong demand and ginning factories selling cotton actively, leading to a decrease in market selling pressure [6][20]. - Following the U.S.-China trade meeting on October 30, the cancellation of certain tariffs has improved the foreign trade environment, resulting in increased operating rates for cotton spinning enterprises [7][21]. Group 3: Future Price Expectations - In the first quarter of 2026, cotton prices may rise but are expected to face risks of retreat after reaching peaks due to increased cotton imports and a significant rise in commercial inventory levels [9][23]. - The total cotton production for the 2025/26 season is projected to reach 7.46 million tons, an increase of 11.34% year-on-year, with commercial inventory expected to rise to 671.66 million tons by the end of December [11][25]. Group 4: Demand Outlook - The demand side is expected to show limited performance in the first quarter, with low profit margins for textile enterprises and weak replenishment intentions ahead of the Spring Festival [13][27]. - The overall demand may remain subdued in February due to the holiday, with a potential recovery in March as the traditional demand season begins, contingent on downstream order follow-ups [13][27].

1. Report Information - Reported industry: Cotton [1] - Report date: January 7, 2026 [2] - Researchers: Yulan Lan, Zhenlei Lin, Haifeng Wang, Chenliang Hong, Youran Liu [3] 2. Core View - Zhengzhou cotton continued its upward trend. After the holiday, with limited changes in the fundamentals and the boost of sentiment in the commodity market, after the short - term speculation on the expected reduction of planting, other positive factors are needed for further support. In January, the pre - Spring Festival restocking situation of downstream enterprises can be observed, with strong pressure at the integer - level resistance levels and a phased convergence space for the internal - external price difference [8] 3. Summary by Section 3.1 Market Review and Operation Suggestions - **Domestic Spot Market**: The latest 328 - grade cotton price index was 15,615 yuan/ton, up 30 yuan/ton from the previous trading day. The fixed - price quotes for 41 - 31 grade/dual 29/less than 3% impurity machine - picked cotton in southern Xinjiang's Kashgar were mostly above 15,300 yuan on a conditioned weight basis, and above 15,400 yuan in northern Xinjiang. The low basis in Kashgar was CF05 + 800 - 900, and in northern Xinjiang it was CF05 + 950 and above [7] - **Domestic Yarn and Fabric Market**: The trading in the pure - cotton yarn market was average, with mainly rigid - demand sales. The prices of pure - cotton yarn remained stable overall, and some manufacturers with low inventory pressure continued to raise prices. The sales in the pure - cotton grey fabric market remained weak, with no increase in sales volume and average new order volume [7] - **International Market**: As of the week ending December 25, the weekly signing volume of 2025/26 US upland cotton was 30,400 tons, a week - on - week decrease of 27% and a 31% decrease from the average of the previous four weeks. The weekly shipment volume was 31,900 tons, a week - on - week decrease of 4% but an 11% increase from the average of the previous four weeks. The application and issuance of China's 1% tariff import quota are about to start, the net long position of the CFTC US cotton fund has continued to rise, and the external market has recovered [8] - **Domestic Supply and Demand**: As of January 5, 2026, the cumulative inspection volume in China was 6.5789 million tons, an increase of 36,400 tons from the previous day. There is still some upward pressure on the estimated output of the 2025/26 season. The downstream product prices have strengthened steadily following the cotton price. Although the operating rate of the downstream industry has decreased slightly, the finished - product inventory has also decreased, and the overall inventory pressure is not large [8] 3.2 Industry News - India has resumed imposing an 11% tariff on cotton imports since January 1, 2026, which is expected to reduce the domestic supply in India and push up the domestic spot price [9] 3.3 Data Overview - The report presents various data charts, including the China Cotton Price Index, cotton spot and futures prices, cotton basis changes, inter - contract spreads, cotton commercial and industrial inventories, warehouse receipt volume, and exchange rates such as the US dollar against the Chinese yuan and the Indian rupee [14][16][17]

Group 1: Report Overview - Report Name: Agricultural Products R & D Report - Cotton and Cotton Yarn Daily [1] - Date: January 6, 2026 - Researchers: Wang Xizhen, Liu Qiannan Group 2: Market Information Futures Market - CF01 contract closed at 14,955, up 215; trading volume was 9,463 lots, down 828; open interest was 76,464 lots, down 6181 [2] - CF05 contract closed at 14,855, up 200; trading volume was 394,159 lots, down 98,579; open interest was 915,854 lots, up 25,993 [2] - CF09 contract closed at 15,040, up 195; trading volume was 32,651 lots, down 12,617; open interest was 78,436 lots, up 6,406 [2] - CY01 contract closed at 20,250, down 225; trading volume was 32 lots, up 32; open interest was 378 lots, unchanged [2] - CY05 contract closed at 20,880, up 230; trading volume was 61 lots, down 22; open interest was 171 lots, up 7 [2] - CY09 contract closed at 20,695, down 90; trading volume was 1 lot, unchanged; open interest was 14 lots, unchanged [2] Spot Market - CCIndex3128B was 15,711 yuan/ton, up 126; CY IndexC32S was 21,240 yuan, up 40 [2] - Cot A was 74.05 cents/pound; FCY IndexC33S was 20,985 yuan, up 24 [2] - (FC Index):M: arrival price was 71.49; Indian S - 6 was 55,800 yuan, unchanged [2] - Polyester staple fiber was 7,450 yuan, up 70; pure polyester yarn T32S was 11,080 yuan, unchanged [2] - Viscose staple fiber was 12,730 yuan, unchanged; viscose yarn R30S was 17,320 yuan, unchanged [2] Spreads - Cotton inter - month spreads: 1 - 5 spread was 100, up 15; 5 - 9 spread was - 185, up 5; 9 - 1 spread was 85, down 20 [2] - Cotton yarn inter - month spreads: 1 - 5 spread was - 630, down 455; 5 - 9 spread was 185, up 320; 9 - 1 spread was 445, up 135 [2] - Cross - variety spreads: CY01 - CF01 was 5,295, down 440; CY05 - CF05 was 6,025, up 30; CY09 - CF09 was 5,655, down 285 [2] - Domestic - foreign spreads: 1% tariff domestic - foreign cotton spread was 2,827, up 139; sliding - scale domestic - foreign cotton spread was 1,810, up 130; domestic - foreign yarn spread was 255, up 16 [2] Group 3: Market News and Views Cotton Market News - As of December 31, 2025, Pakistan's new cotton listing in 2025/26 reached 842,000 tons, almost the same year - on - year; textile mills purchased 757,000 tons, up 1.1% year - on - year; unsold new cotton was 85,000 tons, down 8.5% year - on - year [4] - As of December 30, 2025, ICE cotton futures fund net long ratio was - 16.13% (up 0.41 percentage points week - on - week, up 2.46 percentage points last week) [4] - As of December 27, 2025, Brazil's 2025/26 cotton planting was 25.1% complete, up 8.2 percentage points month - on - month, 0.1 percentage points slower year - on - year, and 0.3 percentage points slower than the three - year average [4] Trading Logic - Xinjiang Cotton Association's article confirms the rumor of reduced cotton planting area in Xinjiang in 2026. Cotton sales are fast, and consumption is expected to increase due to improved Sino - US relations and expansion of Xinjiang textile mills [5] - China signed 20,000 tons of US cotton last week, providing upward momentum for US cotton. The cotton price is supported by fundamental factors, but there may be short - term correction risks [5] Trading Strategies - Unilateral: US cotton is expected to trade in a range, while Zhengzhou cotton is expected to be bullish with short - term correction risks [6] - Arbitrage: Hold off [7] - Options: Hold off [8][12] Cotton Yarn Industry News - The pure cotton yarn market is weak, with only rigid demand. Some factories have orders for 10 - 15 days. Yarn mills raised prices, but downstream acceptance is low [8] - The pure cotton grey fabric market is also weak. Dyeing factories are working on previous orders, and weavers find it difficult to get new orders before the Spring Festival [8] Group 4: Options - Volatility: Cotton's 10 - day HV was 6.4492, slightly higher than the previous day. CF601 - C - 13400 implied volatility was 6.7%, CF601 - P - 13000 was 11.4%, and CF601 - P - 12400 was 17.8% [10] - Options Strategy: Hold off [12] Group 5: Related Attachments - Figures include 1% tariff domestic - foreign cotton spread, cotton 1 - month, 5 - month, 9 - month basis, CY05 - CF05, CY01 - CF01, CF9 - 1 spread, and CF5 - 9 spread [14][17][21][22]

Report Information - Report Date: January 6, 2026 [2] - Industry: Cotton [1] - Research Analysts: Yu Lanlan, Lin Zhenlei, Wang Haifeng, Hong Chenliang, Liu Youran [3] Core Viewpoints - Zhengzhou cotton showed a trend of rising on high volume and then falling back. The spot cotton price index of grade 328 was 15,615 yuan/ton, up 30 yuan/ton from the previous trading day. The cotton yarn market had average trading, and the cotton fabric market had weak sales [7]. - As of January 4, 2026, the cumulative national cotton inspection was 6.5425 million tons, with a potential increase in the 2025/26 output. The downstream product prices followed the cotton price to strengthen steadily, and the overall inventory pressure was not large. After the short - term speculation on the expected reduction in planting, more positive factors were needed to support the price. The upper integer - level resistance was strong [8]. Section Summaries 1. Market Review and Operation Suggestions - Market Review: Zhengzhou cotton rose on high volume and then fell back. The latest grade 328 cotton price index was 15,615 yuan/ton, up 30 yuan/ton. The 2025/26 cotton prices in southern and northern Xinjiang were different, and the basis also varied. The cotton yarn market had average trading, and the cotton fabric market was weak [7]. - Operation Suggestions: In January, attention could be paid to the downstream restocking before the Spring Festival. Fundamentally, the upper integer - level resistance was strong [8]. 2. Industry News - As of January 4, 2026, 1,094 cotton processing enterprises participated in the inspection. The national cumulative inspection was 6.5425 million tons, an increase of 48,000 tons from the previous day. Xinjiang's inspection volume was 6.4656 million tons, and the inland was 43,000 tons [9]. 3. Data Overview - The report presented multiple data charts, including cotton price indices, futures prices, spreads, and inventory data, with data sources from Wind and the Research and Development Department of Jianxin Futures [14][16][17]

1. Report's Investment Rating for the Industry - No relevant information provided. 2. Core Views of the Report - The international cotton market has limited driving forces. The Fed is likely to keep rates unchanged in January. The global cotton supply - demand gap is small, and the US cotton market is expected to fluctuate. [10] - The domestic cotton market has strong expectations. The reduction of cotton planting area in Xinjiang in 2026 is certain, leading to a strong expectation of lower production. The demand side is resilient, and there is positive sentiment at the macro - level. The Zhengzhou cotton futures price has strong support below, and there may be an upward space in the medium - to - long - term. [11] 3. Summary by Relevant Catalogs 3.1 Supply - New - year cotton planting area is expected to decline, with strong sentiment. In Xinjiang, measures to reduce cotton planting area are being implemented. [6] - Pima cotton processing volume increased by about 1.1 million tons year - on - year. As of December 25, 2025, the processing volume was 6.697 million tons, with a month - on - month increase of 0.211 million tons and a year - on - year increase of 1.09 million tons. [39][41] - National cotton inspection volume increased. As of December 30, 2025, Xinjiang's inspection volume was 6.1358 million tons, and the national volume was 6.3243 million tons. [43] - Pima cotton sales rate and sales volume are much higher than the same period last year. As of December 25, 2025, the sales volume was 3.731 million tons, and the sales rate was 50.7%. [46][47] 3.2 Demand - US clothing retail remains strong. In October, the monthly retail sales of US clothing and clothing accessories were 27.128 billion US dollars, with a month - on - month increase of 0.9% and a year - on - year increase of 5.7%. [50][52] - The operating rates of textile enterprises in Vietnam, India, and Pakistan decreased or remained flat. As of December 26, Vietnam's operating rate was 61.9%, India's was 66.9%, and Pakistan's was 65.5%. [54] - In November in China, the retail sales of clothing, footwear, knitwear, and textiles were 154.2 billion yuan, a year - on - year increase of 3.5%. The cumulative retail sales from January to November were 1.3597 trillion yuan, a year - on - year increase of 3.5%. [7][57] - The comprehensive yarn load decreased week - on - week. As of the week of December 26, the comprehensive yarn load was 50.1%, and the pure - cotton yarn mill load was 46.86%. [7][58] - The opening load of the grey fabric end decreased slightly, with a smaller decline than the yarn end. As of the week of December 26, the comprehensive short - fiber fabric load was 51.26%, and the pure - cotton grey fabric load was 48.66%. [7][59] 3.3 Import and Export - In the 2025/26 season, the US cotton export contract volume is still low year - on - year. As of December 11, 2025, the total US cotton export contract volume was 1.445 million tons, a year - on - year decrease of 0.243 million tons. [8][60] - In November, the export value of China's textile yarns, fabrics, and related products was 12.276 billion US dollars, a year - on - year increase of 0.98%. The cumulative export from January to November was 130.01 billion US dollars, a year - on - year increase of 0.9%. [8][64] - In November, the export value of China's clothing and clothing accessories was 11.594 billion US dollars, a year - on - year decrease of 10.93%. The cumulative export from January to November was 137.79 billion US dollars, a year - on - year decrease of 4.4%. [8][66] - In November, China imported 120,000 tons of cotton, a month - on - month increase of 30,000 tons and a year - on - year increase of 10,000 tons. [8][70] - In November, China imported 150,000 tons of cotton yarn, a slight month - on - month increase. [75] - The import cotton price index strengthened month - on - month. As of December 31, 2025, the price index of medium - grade imported cotton with a 1% quota was 12,922 yuan/ton, a week - on - week increase of 59 yuan. [79][81] 3.4 Inventory - US clothing retail inventory increased month - on - month, while wholesaler inventory decreased month - on - month. In September 2025, the retail inventory was 58.488 billion US dollars, and the wholesaler inventory was 28.229 billion US dollars. [82][84] - Yarn comprehensive inventory decreased, and grey fabric inventory accumulated. As of the week of December 26, the yarn comprehensive inventory was 27.66 days, and the short - fiber fabric comprehensive inventory was 31.92 days. [85][86] - Spinning enterprises' raw material inventory decreased slightly, and finished - product inventory decreased significantly. As of the week of December 26, the spinning enterprises' cotton inventory was 31.94 days, and the cotton yarn inventory was 27.66 days. [88] - Weaving factories' raw material and finished - product inventory increased month - on - month. As of the week of December 26, the weaving factories' cotton yarn inventory was 6.92 days, and the pure - cotton grey fabric inventory was 35.06 days. [89] - China's domestic cotton commercial inventory increased by 0.66 million tons month - on - month, basically the same year - on - year. As of December 15, 2025, the commercial inventory was 5.349 million tons. [90][92] - The number of cotton warehouse receipts is higher than the same period last year. As of December 30, 2025, the total number of warehouse receipts and effective forecasts was 9,185. [97][99] 3.5 Price - The spot price of cotton moved up. As of December 30, 2025, the national average price was 15,543 yuan/ton, a month - on - month increase of 4.34%. [18][22] - The 1 - 5 spread of cotton strengthened. As of December 31, 2025, the 1 - 5 spread was 70 yuan/ton, a month - on - month increase of 45 yuan. [27][29] - The price difference between domestic and foreign cotton under a 1% tariff fluctuated and strengthened. As of December 30, 2025, the price difference was 2,621 yuan/ton, a month - on - month increase of 605 yuan. [30][31] - The increase in the cotton yarn futures price was lower than that of the cotton futures price. As of December 31, 2025, the closing price of cotton yarn futures was 20,585 yuan/ton, a month - on - month increase of 2.69%. [33][34] - The cotton yarn basis gradually converged. As of December 31, 2025, the basis was 555 yuan/ton, a month - on - month decrease of 210 yuan. [35][36] 3.6 Option - The historical volatility of cotton options increased significantly. [100]

1. Report Industry Investment Rating No relevant information provided. 2. Core View of the Report The market had long anticipated the reduction in cotton planting area in Xinjiang. Currently, the price of Zhengzhou cotton has reached a recent high, and the price volatility may increase. Fundamentally, the off - season is not slow, with a decent downstream operating rate. Despite domestic production increase, imports are restricted, and the supply - demand relationship is balanced. Coupled with positive expectations, the price trend of Zhengzhou cotton is strong. It is recommended to wait for a pullback and then go long [9]. 3. Summary According to the Directory 3.1 Monthly Assessment and Strategy Recommendation - **Market Review**: In December, the price of US cotton futures fluctuated within a narrow range. By December 31, the closing price of the March contract of US cotton futures was 64.3 cents per pound, a decrease of 0.43 cents per pound or 0.66% from the previous month. The spread between the March - May contracts of US cotton was - 1.32 cents per pound, a decrease of 0.08 cents per pound from the previous month. Domestically, the price of Zhengzhou cotton rose significantly in December. The closing price of the May contract of Zhengzhou cotton was 14,585 yuan per ton, an increase of 900 yuan per ton or 6.58% from the previous month. The China Cotton Price Index (CCIndex) 3128B was 15,556 yuan per ton, an increase of 660 yuan per ton from the previous month. The basis was 971 yuan per ton, a decrease of 240 yuan per ton from the previous month. The spread between the January - May contracts of Zhengzhou cotton was 70 yuan per ton, an increase of 30 yuan per ton from the previous month [9]. - **Industry Information**: In December 23, 2025, the Office of the Leading Group for the Development of the Cotton Industry in the Autonomous Region held a special meeting on reducing the cotton planting area in Xinjiang. According to data released by the General Administration of Customs, in November 2025, China imported 120,000 tons of cotton, an increase of 10,000 tons year - on - year. From January to November 2025, China's cumulative cotton imports were 900,000 tons, a decrease of 1.6 million tons year - on - year. As of the end of November in the 2025/26 season (from August to July of the following year), China's cotton imports were 880,000 tons, a decrease of 410,000 tons year - on - year. According to the latest data released by Mysteel, as of the week ending December 26, the operating rate of spinning mills was 64.7%, a decrease of 0.5 percentage points from the previous week, an increase of 2.3 percentage points compared with the same period last year, and a decrease of 6.7 percentage points compared with the average of the past five years (71.4%). The national commercial cotton inventory was 5.17 million tons, an increase of 100,000 tons year - on - year. The latest December monthly supply - demand report data released by USDA showed that the global cotton production forecast for the 2025/26 season was revised down by 60,000 tons to 26.08 million tons compared with November. Among them, the production forecast for the United States was revised up by 30,000 tons to 3.11 million tons; the production forecast for Brazil remained at 4.08 million tons; the production forecast for India remained at 5.23 million tons; and the production forecast for China remained at 7.29 million tons [9]. - **View and Strategy**: Wait for a pullback and then go long [9][10][11]. 3.2 Spread Trend Review The report presents multiple spread trend charts, including the China Cotton Price Index, the basis trend of the main contract of Zhengzhou cotton, import profit, Zhengzhou cotton monthly spreads, the Zhejiang - Xinjiang spread, the spinning mill's immediate profit, and various spreads of US cotton and international cotton price spreads, but no specific text analysis of these trends is provided [24]. 3.3 Domestic Market Situation - **Domestic Cotton Production**: Charts show the processing and inspection quantity of cotton in China and the purchase price of Xinjiang seed cotton [38]. - **Cotton Import Volume**: Charts show China's monthly and annual cumulative cotton import volumes [40]. - **US Export Contract Quantity to China**: Charts show the cumulative and weekly export contract quantities of the US to China [42]. - **Cotton Yarn Import Volume**: Charts show China's monthly and annual cumulative cotton yarn import volumes [44]. - **Downstream Operating Rate**: Charts show the operating rates of spinning mills and weaving mills [47]. - **National Sales Progress**: Charts show the national cotton sales progress and the daily trading volume of the Light Textile City [49]. - **Cotton Inventory**: Charts show China's weekly commercial cotton inventory and the monthly inventory of commercial + industrial cotton [52]. - **Spinning Mill's Raw Material and Finished - Product Inventory**: Charts show the cotton inventory and yarn inventory of spinning mills [54]. 3.4 International Market Situation - **US Planting Situation**: Charts show the proportion of the US cotton - planting area without drought, the cotton good - quality rate, the bi - weekly and cumulative processing volumes of US cotton [58]. - **US Production and Planting Area**: Charts show the production forecast and planting area of US cotton [61]. - **US Export Contract Progress**: Charts show the cumulative and weekly export contract quantities of US cotton in the current year [65]. - **US Export Shipment Volume**: Charts show the annual cumulative and weekly export shipment volumes of US cotton [67]. - **US Supply and Demand Situation**: Charts show the supply surplus/shortage and inventory - to - consumption ratio of US cotton [69]. - **Brazilian Production and Planting Area**: Charts show the planting area and production of Brazilian cotton [70]. - **Brazilian Export Volume**: Charts show the export volume of Brazilian cotton [73]. - **Brazilian Supply and Demand Situation**: Charts show the supply surplus/shortage and inventory - to - consumption ratio of Brazilian cotton [76]. - **Indian Production and Planting Area**: Charts show the planting area and production of Indian cotton [78]. - **Indian Consumption and Import - Export**: Charts show the consumption, import, and export volumes of Indian cotton, as well as the supply surplus/shortage and inventory - to - consumption ratio [81].

Report Title - "No obvious negative factors, short - term high - level shock - Cotton Weekly Report 20251229" [1] Report Industry Investment Rating - Not provided Core View - The report believes that the cotton market is expected to be volatile and bullish. International cotton prices briefly pulled back due to limited improvement in export data at the beginning of the week but then rebounded driven by improved US cotton contracts and shipment data, as well as the strength of the peripheral financial and grain markets. In the domestic market, Zhengzhou cotton continued its strong upward trend, mainly driven by policy expectations. The market rumor of a potential reduction in Xinjiang's cotton planting area next year and the approaching evaluation window of the target price subsidy policy have led to strong expectations of future supply contraction. Meanwhile, the overall production and sales in the textile downstream are fair, and the slight increase in cotton yarn prices has provided some support to the market. Key attention should be paid to policies and demand - side new market information [3] Summary by Directory 1. Market Review US Cotton Weekly Market Review - ICE cotton was reported at 63.36 - 64.81 cents per pound, with the Friday closing price at 64.49, a week - on - week decrease of 1.2%. As of December 12, the number of unpriced contracts of sellers on the ON - CALL 2603 contract decreased by 1039 to 21369, a decrease of 20,000 tons compared to the previous week. The total number of unpriced contracts of sellers in the 25/26 season decreased by 1343 to 38677, equivalent to 880,000 tons, a decrease of 30,000 tons compared to the previous week. The total number of unpriced contracts of ICE sellers decreased to 48505, equivalent to 1.1 million tons, a decrease of 1188 compared to the previous week, or 30,000 tons [9] Zhengzhou Cotton Weekly Market Review - It was reported at 14040 - 14700 yuan per ton, with the Friday closing price at 14535 yuan per ton, a week - on - week increase of 120 yuan. As of December 19, the registered warehouse receipts of No. 1 cotton were 3870, and the forecast warehouse receipts were 3852, totaling 7722, equivalent to 324,324 tons [10] Domestic Cotton Spot Market - This week, domestic cotton futures and spot prices rose significantly. The spot fixed - price transactions of cotton were active, mainly purchased by traders. The spot fixed - price of cotton gradually increased with the rise of Zhengzhou cotton and active trading. The basis of spot sales changed little, with local rigid - demand transactions, and many transactions were light. As of Friday, the fixed - price quotes of machine - picked cotton of grades 31 - 41/double 29/impurity within 3 in the northern and southern Xinjiang regions in 2025/26 were mostly above 15400 - 15500 (on a legal weight basis). For the same quality, the low basis in the Kashgar area was CF05 + 800 - 900, and the basis quotes in the northern Xinjiang production area were mostly above 1000, with a small amount below 1000. The low basis of grade 41 was mainly 900 - 1000, all for self - pick - up in Xinjiang [12][15] 2. Domestic Cotton Market Supply - The China Cotton Association predicts that the total cotton output in the 2025/26 season is expected to reach 7.216 million tons, a year - on - year increase of 8.3%, reaching a new high since 2013. Among them, the Xinjiang cotton region is particularly prominent, with an expected total output of about 6.911 million tons, a year - on - year increase of 9.2%, accounting for 95.8% of the national total output [18] Import - In October 2025, 90,000 tons of cotton were imported, a year - on - year decrease of 15,800 tons (compared to 105,800 tons) and a month - on - month decrease of 5000 tons (compared to 95,000 tons). From January to October 2025, the cumulative import was 770,800 tons, a year - on - year decrease of 67.4% or 1.595 million tons (compared to 2.3662 million tons). In the 2025/26 season, the cumulative import was 185,000 tons, a year - on - year decrease of 17% or 38,000 tons (compared to 223,100 tons) [24] Demand - Demand performance is average but still shows resilience. The operating rate remains flat [27][33] Profit - This week, the processing profit of ginning factories was 1013 - 1078 yuan per ton, and the immediate profit of spinning mills was - 1351.5 - - 507 yuan per ton [36] Inventory - As of the week of December 26, the national commercial cotton inventory was 5.125 million tons, a week - on - week increase of 117,700 tons, 99,200 tons higher than the same period last year. At the end of November, the industrial cotton inventory of cotton textile enterprises was 925,600 tons, a month - on - month increase of 51,400 tons [42] 3. International Market Global Cotton Supply and Demand - In the report released by USDA on December 10, the US cotton output in the 2025/26 season was further increased by 30,000 tons to 3.11 million tons. The global cotton output was reduced by 60,000 tons to 26.08 million tons compared to November, and the global cotton consumption was reduced by 60,000 tons to 25.82 million tons, with an overall limited impact [44]

Report Industry Investment Rating - Not provided in the content Core Viewpoints - ICE cotton has rebounded due to a weaker US dollar, a significant increase in Chinese cotton prices, and improved weekly US cotton export data, but its upward momentum is limited, currently in a low - level consolidation. Domestic cotton prices are driven by market sentiment, with short - term expectations of a slightly bullish but limited - upside trend. Attention should be paid to market sentiment, downstream profits, and out - of - quota cotton import profits [1][2][18] Summary by Directory 1. Market Data - ICE Cotton Main Contract: Opened at 63.75, reached a high of 64.81, a low of 63.48, and closed at 64.46, up 0.81 (1.27%). Volume was 52,219 lots, down 44,678 lots, and open interest was 180,943 lots, down 2,503 lots [6] - Zhengzhou Cotton Main Contract: Opened at 14,045, reached a high of 14,700, a low of 14,010, and closed at 14,535, up 520 (3.71%). Volume was 1,747,852 lots, up 538,313 lots, and open interest was 903,860 lots, up 142,317 lots [6] - Cotton Yarn Main Contract: Opened at 20,050, reached a high of 20,720, a low of 20,045, and closed at 20,585, up 535 (2.67%). Volume was 60,104 lots, up 21,170 lots, and open interest was 23,202 lots, up 381 lots [6] 2. Fundamental Analysis International Cotton Situation - ICE Cotton: A slight rebound due to favorable factors, but overall US cotton export sales are average, so it remains in a low - level consolidation [7] - US Cotton Weekly Export Sales Data: As of the week ending December 11, 2025/26 US upland cotton weekly contracts were 69,100 tons, a 99% week - on - week increase and a 95% increase from the four - week average. 2026/27 US upland cotton weekly contracts were 3,400 tons. 2025/26 US upland cotton weekly shipments were 30,500 tons, a 32% week - on - week increase and a 17% increase from the four - week average. The total signed sales volume of US upland and Pima cotton in the 2025/26 season was 444,700 tons, accounting for 55% of the annual forecasted total exports; the cumulative export shipments were 605,100 tons, accounting for 42% of the total annual contracts [7] - Other Major Cotton - Producing and Consuming Countries: - India: CCI's procurement continues. The total inventory is 944,000 tons. As of December 23, the cumulative market volume this year was 2,006,000 tons, an increase of 272,000 tons from December 17 [8] - Brazil: Planting progress is slow. As of December 20, 2025/26 cotton planting was 16.9% complete, a 6.8 - percentage - point increase from the previous period, 3 percentage points slower year - on - year, and 3.7 percentage points slower than the three - year average [8] - Pakistan: Cotton import demand remains moderate. In November, Pakistan imported 44,000 tons of cotton, a 41.5% decrease from the previous month and a 61.9% decrease year - on - year [9] - Vietnam: Sporadic purchases of imported cotton. Transactions are mainly concentrated in certified cotton such as BCI and US Cotton Trust Protocol [9] - Southeast Asian Textile Industry Startup Rates: As of the week ending December 26, India's textile enterprise startup rate was 66.9%, Vietnam's was 61.9%, and Pakistan's was 65.5% [11] Domestic Cotton Situation - Cotton Prices and Transactions: Domestic cotton spot prices rose significantly in the week of December 26. Spot fixed - price transactions were active, mainly by traders. Spinning mills' purchases were light. As of Friday, the fixed - price quotes for 31 - 41 grade double - 29 cotton with less than 3% impurity in northern and southern Xinjiang were mostly above 15,400 - 15,500 (gross weight). The low - basis price in Kashgar was CF05 + 800 - 900, and in northern Xinjiang, the basis was mostly above 1,000 [12] - Cotton Warehouse Receipts: As of December 26, there were 4,853 registered warehouse receipts and 3,834 pending warehouse receipts for No. 1 cotton, totaling 8,687 receipts, equivalent to 364,854 tons [12] - Spinning Mills and Cloth Mills: The confidence of pure - cotton yarn spinning mills has been boosted, with increased willingness of traders and downstream weavers to replenish stocks, but overall it remains mainly for rigid demand. High - count yarns are in better demand, while medium - and low - count yarns have slow sales and inventory backlogs. Some enterprises reported that year - end foreign trade orders were 30% lower than the same period last year. Pure - cotton yarn prices have followed cotton prices higher, with an expected further increase of 100 - 200 yuan. The inventory pressure of spinning mills is less than in previous years. Xinjiang spinning mills maintain a high startup rate, while inland spinning mills' startup rates continue to decline. The theoretical profit of Xinjiang spinning mills is about 250 yuan/ton, and the cash flow of inland spinning mills is about - 150 yuan/ton. The all - cotton grey cloth market is still divided, with some areas having a stocking market. Weaving mills' inventory is expected to decline slightly before the Spring Festival. Orders are mainly small and scattered, and the export market is mainly for inquiries, with few actual orders [13] 3. Basic Data Charts - The report provides charts on cotton sales progress, commercial inventory, spinning mills' cotton inventory, weaving mills' yarn inventory, spinning enterprises' yarn inventory, cotton cloth enterprises' cotton cloth inventory, yarn enterprises' startup rate, cotton cloth enterprises' startup rate, pure - cotton yarn profit, pure - cotton cloth CGC32 profit, cotton 1 - 5 spread, cotton import profit, cotton basis, and Zhengzhou cotton warehouse receipts [15][16][17] 4. Operational Suggestions - ICE cotton is expected to remain in low - level consolidation in the short term, with attention to external market sentiment. Domestic cotton futures and spot prices continue to strengthen, and the basis remains firm. In the short term, Zhengzhou cotton futures are expected to be slightly bullish but with limited upside. Attention should be paid to market sentiment, downstream profits, out - of - quota cotton import profits, and spot basis changes. It is advisable to wait until after the Spring Festival to trade based on the discussion of Xinjiang's cotton planting area in 2026 [18]

Core Viewpoint - Cotton futures have shown a strong upward trend, with prices increasing for five consecutive weeks, reaching a high of 14,550.00 yuan/ton, marking a 2.36% rise and the highest level since October of the previous year [1] Group 1: Market Conditions - As of December 24, the imported cotton cost within the quota (1% tariff) was 12,863 yuan/ton, which is 2,408 yuan/ton lower than the domestic standard-grade cotton price. The cost of imported cotton with sliding scale tax was 13,892 yuan/ton, 1,379 yuan/ton lower than domestic prices [2] - The U.S. cotton export sales totaled 319,649 bales for the week ending December 11, with 304,689 bales for the 2025/26 season and 14,960 bales for the 2026/27 season. This marked the highest net sales since November 6, significantly exceeding the previous week's 153,606 bales [2] Group 2: Industry Insights - There is an expectation of reduced cotton planting area in Xinjiang, potentially decreasing by 5-7 million mu, which is over 10%. This reduction is anticipated to lead to a corresponding decrease in production, supporting future contract prices [4] - Despite a good harvest of domestic cotton this year, the sales progress of cotton from ginning factories in both southern and northern Xinjiang is reported to be rapid, with commercial inventories not significantly exceeding last year's levels [4] - The overall sentiment in the commodity market is optimistic, contributing to the steady rise in cotton futures and spot prices. However, the continuous increase in cotton prices is negatively impacting the profits of downstream yarn manufacturers, and an increase in cotton yarn imports suggests that supply remains ample [4]

1. Report Industry Investment Rating No relevant content provided. 2. Core Viewpoints of the Report - In 2026, the cotton planting area in the US may remain stable with a slight decline, and attention should be paid to whether the planting area in the Southern Hemisphere will decrease [2][105]. - There is uncertainty about the cotton planting area under policy guidance. Although the market speculates that the policy may lead to a decline in the planting area in 2026, it remains unknown whether the policy will be implemented as speculated and whether the implementation intensity can actually reduce the area [2][111]. - The international economic and trade environment is gradually improving, and the phased easing of Sino - US trade relations reduces export tariffs, improving the export outlook for textiles. Coupled with the continuous expansion of Xinjiang's cotton textile production capacity, it is beneficial for domestic cotton consumption [2][111]. - The cotton price was at a low level for a long time in the 2024/2025 season, and the current valuation is in a historically low range. As the supply - demand pattern improves and market sentiment recovers, valuation repair will be an important driving force for price increases [2][111]. 3. Summary According to the Table of Contents 3.1 Market Review - **ICE Narrow - Range Fluctuation**: In 2025, the US cotton production decreased year - on - year. Due to continuous Sino - US tariff conflicts and China's small volume of signing US cotton contracts, the ICE US cotton continuous contract showed a fluctuating trend, mostly in the range of 65 - 68 cents. After the US government's record - breaking shutdown, the price center of ICE US cotton moved down since the third quarter, generally maintaining in the range of 63 - 66 cents [10]. - **ZCE First Declined and Then Rose, with Overall Low Valuation**: Supported by the downstream raw material replenishment and order - grabbing expectations, Zhengzhou cotton rose moderately at the beginning of the year. Affected by tariffs, it started to decline in late February, especially after the US announced the so - called "reciprocal tariffs" at the beginning of April, Zhengzhou cotton tumbled. After the Geneva talks between China and the US in early May, Zhengzhou cotton soared. With the marginal weakening of the negative impact of tariffs and concerns about the supply before the new cotton was listed, Zhengzhou cotton continued to rise until late July. However, due to the uncertainty of Sino - US trade relations and the expectation of new cotton production increase, the overall increase was not significant [10][11]. 3.2 Global Cotton Output Increased Slightly Year - on - Year, Focus on the Cotton Planting Area in the Southern Hemisphere - **Global Cotton Ending Stocks Increased, with Overall Low Pressure**: According to the December USDA report, compared with the previous month, the global cotton beginning stocks estimate increased by 120,000 bales, the production estimate decreased by 290,000 bales, and the consumption estimate decreased by 270,000 bales, with the ending stocks estimate increasing by 40,000 bales. In the 2025/26 season, the global cotton beginning stocks estimate increased by 1.21 million bales year - on - year, the production estimate increased by 510,000 bales, the consumption estimate decreased by 320,000 bales, and the ending stocks estimate increased by 1.36 million bales, but the overall pressure was not great [12]. - **Improved Import Demand for Textiles and Clothing in Europe and the US**: - **Consumer Confidence**: In November, the US Michigan consumer confidence index was 51, down 2.6 points month - on - month and had been declining for three consecutive months, rising to 53.3 in December. The EU consumer confidence index was - 13.6 in November, basically flat month - on - month, and - 12.4 in December, down 1.2 points month - on - month and up 5.1 points year - on - year, remaining at the highest level in the same period in the past three years since March [14]. - **Import Volume**: In September, the EU's textile and clothing imports from China, Vietnam, Bangladesh, and the US were 5.66 billion euros, up 380 million euros month - on - month and slightly up 50 million euros year - on - year. From January to September, the EU's cumulative imports from these four countries were 43.675 billion euros, up 4.213 billion euros year - on - year. In September, the US imported a total of $10.582 billion worth of textiles and clothing, down $1.161 billion year - on - year, a decrease of 9.89%. From January to September, the US's cumulative imports were $90.413 billion, down $210 million year - on - year. China's share in the US market dropped significantly, with cumulative imports from China being $16.912 billion, down $6.352 billion year - on - year, and the market share dropping by 6.96 percentage points compared with the same period last year [16]. - **开机率 in Southeast Asia**: The开机率 of Indian and Vietnamese spinning mills showed a downward trend, while that of Pakistani spinning mills showed an upward trend and was at the highest level in the same period in the past three years, performing the best [22][26]. - **Slow Progress of US Cotton Export Sign - ups**: - **High Ending Stocks and Limited Production Adjustment Space**: In December, compared with November, the US cotton production estimate decreased by 150,000 bales, the consumption estimate decreased by 100,000 bales, and the ending stocks estimate increased by 200,000 bales to 4.5 million bales. The 2025/2026 US cotton planting area was expected to be 9.3 million acres, the harvested area was estimated to be 7.37 million acres, the yield per acre was estimated to be 929 pounds, and the total production was 14.268 million bales, down 145,000 bales year - on - year [29]. - **Slow Overall Sign - ups and a Sharp Drop in China's Sign - ups**: As of the week of November 13, the weekly sign - up of 2025/26 US upland cotton was 42,600 tons, down 36% week - on - week, up 10% from the four - week average, and up 22% year - on - year. The total sign - up volume of US cotton in the 2025/26 season was 1.2706 million tons, accounting for 49% of the annual predicted total export volume, 12 percentage points slower than the same period last year. China's total sign - up volume was 37,000 tons, a significant decrease of 74% compared with the same period last year [37][42]. - **Slow US Cotton Inspection**: As of the week of December 5, 2025, the cumulative inspection volume of US upland cotton + Pima cotton was 2.0085 million tons, accounting for 65.7% of the estimated US cotton production for the year, 11% slower year - on - year. Considering the 10% production reduction this year, the inspection speed was comparable to that of last year [45]. - **Supply - Demand Situation in Other Cotton - Producing Countries**: - **Accumulated Inventory in India**: In the 2025/26 season, India's cotton beginning stocks increased by 710,000 bales year - on - year, the export volume estimate was basically flat year - on - year, the import volume estimate decreased slightly by 240,000 bales year - on - year, and the ending stocks estimate increased by 500,000 bales year - on - year to the highest level in the past three years [50]. - **Divergent Estimates of Brazilian Cotton Production**: Brazilian institutions had different forecasts for the increase or decrease of Brazilian cotton production in 2025/26, but the market expected that the cotton planting area in Brazil would be difficult to increase this season. The USDA report showed that the Brazilian cotton production estimate for the 2025/26 season was 18.75 million bales, a 10% increase year - on - year [58][60]. - **Probable Decrease in Australian Cotton Production**: Affected by factors such as insufficient irrigation water supply, poor soil moisture during the sowing period, rising planting costs, and better returns from competing crops, Australia's cotton planting area was expected to decline significantly in the 2025/26 season. The latest USDA report showed that Australia's cotton production estimate for the 2025/26 season was 4.5 million bales, a 2.3% decrease year - on - year [62]. 3.3 Domestic Market Supply - Demand Situation - **Substantial Increase in Production**: - **Increased Production and Low Imports**: In the 2025/26 season, China's cotton production estimate increased by 1.5 million bales year - on - year to 33.5 million bales, reaching a new high since 2013, and consumption decreased slightly by 500,000 bales to 38.5 million bales. Imports were expected to remain stable with a slight increase, and the ending stocks estimate increased by 320,000 bales year - on - year to 351.62 million bales, at a high level in the past five years [64]. - **Non - Concentrated Pima Cotton Costs and Faster Sales**: As of December 11, the national Pima cotton processing rate was 84%, 2.2 percentage points higher year - on - year, and the sales rate was 41.6%, 23.5 percentage points higher year - on - year [68]. - **Flat Commercial Stocks Year - on - Year**: As of the end of November, the domestic cotton commercial inventory was 4.68 million tons, a significant increase of 1.753 million tons month - on - month due to the listing of new cotton, and basically flat year - on - year, at the highest level in the same period in recent years [72]. - **First Decline and Then Rise in the Domestic - Foreign Price Difference and a Sharp Drop in Cotton Imports**: In October, China imported 90,000 tons of cotton, down 10,000 tons month - on - month and 20,000 tons year - on - year. From January to October, the cumulative cotton imports were 770,000 tons, a significant decrease of 1.6 million tons year - on - year, a decrease of 67.5% [76]. - **Moderate Recovery in Domestic Demand and Poor Exports**: - **Recovery of Cotton Spinning PMI in the Fourth Quarter**: In November, the China Cotton Textile Industry Purchasing Managers' Index (PMI) decreased slightly by 2 points month - on - month, and the decline was significantly narrower than in the same period of last year and the year before. The overall trend of cotton spinning PMI was similar to that of last year, not as good as in 2023, and the peak - season characteristics were not obvious [86]. - **Poor Overall Spinning Mill Operation**: The domestic spinning mill operation load was basically at the lowest level in the same period in the past three years this year, showing a trend of high in the front and low in the back, and the peak - season characteristics were not obvious. As of this week, the spinning mill operation load index was 51, and the finished - product inventory was 27.6 days. The cloth mill operation rate reached a phased high in early April and then fluctuated and declined, and started to recover in August. As of this week, the cloth mill operation load index was 51.7, and the finished - product inventory was 31.2 days [87]. - **Moderate Recovery in Domestic Demand**: In October, the domestic retail sales of textiles and clothing were 147.08 billion yuan, a 6.3% year - on - year increase. From January to October, the cumulative retail sales were 1.20528 trillion yuan, a 3.5% year - on - year increase, and the growth rate was 2.4 percentage points higher than in the same period last year [95]. - **Slight Year - on - Year Decline in Textile and Clothing Exports, with Overall Declines in Exports to the US and ASEAN**: In November, domestic textile and clothing exports were $23.87 billion, a 5.1% year - on - year decrease, and the decline was 7 percentage points narrower than in the previous month. From January to November 2025, the cumulative textile and clothing exports were $267.79 billion, a slight 1.9% year - on - year decrease. Exports to ASEAN and the US decreased significantly, while exports to the EU market remained stable [97]. 3.4 Future Outlook - **Possible Stable but Slightly Declining US Cotton Planting Area, Focus on Whether the Southern Hemisphere's Area Will Decrease**: Based on the soybean/cotton and corn/cotton price - ratio trends, the current price ratios are significantly higher than last year. Judging from the price ratios alone, the US cotton planting area in 2026 is likely to remain stable with a slight decline compared to 2025. The Brazilian cotton planting area is expected to be difficult to increase this season, and the Australian cotton planting area is expected to decline significantly in the 2025/26 season [2][105]. - **Uncertainty about the Cotton Planting Area under Policy Guidance**: In 2026, a new cotton target price will be formulated. The market speculates that the policy may lead to a decline in the cotton planting area in 2026, but it remains unknown whether the policy will be implemented as speculated and whether the implementation intensity can actually reduce the area [111].