Report Overview - Report title: [Galaxy Research] Investigation Report on Cotton Planting and Inventory in Northern Xinjiang (II) [2] - Report date: June 17, 2025 [2] - Researcher: Liu Qiannan [7] Research Background - The cotton planting area will continue to increase in the 2025/26 season, and the report aims to understand the change in Xinjiang's cotton output [3] - Xinjiang's spinning capacity is approaching 30 million spindles and still expanding, and the report wants to know the operation of textile enterprises under the deteriorating international trade environment [3] - With the accelerating出库 speed of Xinjiang cotton, the report intends to find out the real inventory situation due to concerns about tight supply during the off - season before new cotton is on the market [3] Research Route - Urumqi - Wujiaqu - Shihezi - Kuitun - Jinghe [4] Research Findings Spinning Enterprise D - Enterprise situation: It has a capacity of about 100,000 spindles, two processing workshops (self - operated and contract - processing), 30 - 50 employees, mainly produces pure - cotton yarn C32S and C40S, and the processing fee is 4000 - 5000 yuan/ton with different varieties having different fees [6] - Startup situation: Its textile machines in Xinjiang are mostly running, while its inland spinning mills operate during off - peak hours at night as many inland spinning machines are shut down [8] - Inventory: Since it mainly does contract - processing, its cotton and yarn inventories are small [9] - Order situation: Orders are average, and the high impurity in cotton affects yarn quality [9] - Market outlook: The downstream market is average, cotton prices may have small fluctuations. The enthusiasm of ginning factories in Northern Xinjiang to lease factories is low, and some have the idea of selling off, showing less confidence than in previous years [9] Warehouse E - Enterprise situation: It has a storage capacity of about 150,000 tons [10] - Cotton inventory: The incoming volume this year accounts for about 50% of the total capacity. The peak outgoing volume can reach 2000 tons/day, with peak periods after the Spring Festival and in April. The outgoing speed has slowed down recently, and the remaining inventory is small, with most goods owned by large enterprises and little by private enterprises [10] Warehouse F - Enterprise and inventory situation: It has a small storage capacity of 40,000 - 50,000 tons, and the remaining cotton inventory is low. The outgoing speed has slowed down recently. The cotton outgoing progress this year is slightly faster than last year, with 20+ trucks per day during the peak last year and 3 - 4 trucks per day recently [11] Warehouse G - Enterprise and inventory situation: It is a large warehouse with a capacity of 400,000 - 500,000 tons. The incoming volume this year is slightly less, about 300,000 - 350,000 tons. It still has some inventory, and the outgoing speed has slowed down recently after being fast after the Spring Festival and maintaining a basic volume in March and April [12] - Other: The new cotton is growing well, and the output in the new season may not change much compared to this season. Some ginning factories in Northern Xinjiang plan to lease or sell off, and the willingness of enterprises to lease factories is low this year [12]

Report Summary 1. Industry Investment Rating The document does not provide an overall industry investment rating. However, it gives individual ratings for different agricultural products: - **Oscillation**: Oils and fats, protein meal, corn and starch, natural rubber, synthetic rubber, paper pulp [4][5][6][7][8][9][11] - **Oscillation on the strong side**: Corn and starch [5] - **Oscillation on the weak side**: Livestock, cotton, sugar, log [6][9][11][12] 2. Core Viewpoints - **Protein Meal**: With the increase in soybean premium and the rise in the futures market leading the spot market, the basis weakens. It is expected that before the weather speculation, US soybeans will maintain a range - bound oscillation. Under the pressure of increasing domestic supply, the spot price of soybean meal is expected to be weaker than the futures market, and the basis will continue to be weak. The futures market of soybean meal will move within a range following US soybeans [1][2][4]. - **Oils and Fats**: The market sentiment has weakened. In the medium - term, driven by trade policies, overseas biodiesel policies, and the supply of oilseeds, the oils and fats market is expected to maintain a range - bound operation. Attention should be paid to the effectiveness of technical support [4]. - **Corn and Starch**: The spot price remains strong, while the futures market rises first and then falls. In the medium - term, it is expected to operate on the strong side with oscillations. The continuous tightening of imported grains further confirms the expectation of inventory reduction, but continuous sharp increases are unlikely, and attention should be paid to potential negative factors such as import auctions [4][5]. - **Livestock**: In the short - term, the spot price of livestock is weak due to the off - season demand. In the long - term, the supply pressure will continue to increase, and the price is expected to be weak with oscillations. The near - term market is under pressure, while the far - term market may improve due to expectations of inventory clearance and capacity adjustment [6]. - **Natural Rubber**: The fundamentals are still weak, and the impact of commodity atmosphere and capital sentiment is significant. The downward trend may continue. Although the futures market may temporarily stabilize and rebound slightly with the improvement of macro - sentiment, attention should be paid to the performance after the futures market reaches the pressure level [6][7]. - **Synthetic Rubber**: The trading of raw materials is weak, and the rise of the futures market is blocked. Attention should be paid to the support level of the futures market after the price of butadiene stabilizes. The futures market of synthetic rubber is expected to temporarily stabilize but still face pressure from above [8][9]. - **Cotton**: In the short - term, it will oscillate within the range of 13,000 - 13,800 yuan/ton, and in the long - term, it will be weak with oscillations. Although the current low inventory may support the near - term contracts, the expected increase in new crop production will put pressure on the price in the long - term [9]. - **Sugar**: In the long - term, due to the expected supply surplus in the new crushing season, the sugar price has a downward driving force; in the short - term, the weakening of the external market leads to a decline in valuation, and the sugar price is weak with oscillations [11]. - **Paper Pulp**: The market operates flatly and is expected to oscillate. The overall supply - demand situation is weak, but the correction of the valuation of Russian needles may support the futures market [11]. - **Log**: The spot price is stable, and the futures market corrects. In the short - term, it is expected to be weak, and the volatility increases [12]. 3. Summary by Related Catalogs **Market Outlook** - **Oils and Fats**: The market sentiment is weakening. Due to the optimistic sentiment of Sino - US trade negotiations and the good growth of US soybeans, the US soybean and soybean oil futures markets show different trends. Domestically, the cost of imported South American soybeans has increased, and the inventory of domestic soybean oil is expected to rise. For palm oil, the production and export in May in Malaysia were higher than expected, and the inventory was slightly lower than expected. The export in early June is expected to increase, and the short - term production pressure may decrease marginally. For rapeseed oil, the domestic inventory is slowly decreasing but still at a high level, and the import volume may gradually decrease in the future [4]. - **Protein Meal**: Internationally, the sowing and emergence of US soybeans are going smoothly, but there is a trend of increasing drought in the quarterly outlook. The premium of South American soybeans is rising, and the average daily export volume in the first week of June decreased year - on - year. It is expected that the price of US soybeans will oscillate within a range. Domestically, the spot price of soybean meal continues to rise slightly, but the transaction volume of spot and basis has decreased significantly. The supply pressure restricts the increase of the spot price. The profit of oil mills has increased, and the inventory of soybean meal is expected to rise seasonally, putting pressure on the basis. The downstream inventory of soybean meal has increased, and the downstream is becoming more cautious after replenishing at low levels. The inventory of breeding sows has increased year - on - year, indicating that the rigid demand for soybean meal consumption may increase steadily [1][4]. - **Corn and Starch**: Affected by the start of the minimum purchase price policy for wheat in Henan, the market sentiment is bullish. The continuous tightening of imported grains confirms the expectation of inventory reduction. However, the arrival of new wheat has reduced the demand for corn, and the futures market has fallen due to profit - taking by long - positions. In the medium - term, it is expected to operate on the strong side with oscillations [4][5]. - **Livestock**: After the recent sharp decline in pig prices, the state will conduct a central reserve frozen pork purchase and storage, which boosts market sentiment. However, the inventory pressure is still high, and the fundamentals are still loose. In the short - term, the slaughter weight of livestock decreases, and the supply of large pigs increases. In the medium - term, the number of new - born piglets from January to April 2025 continued to increase, and it is expected that the supply of livestock will increase in the third quarter. In the long - term, the production capacity is still at a high level, and the motivation for capacity reduction is insufficient. The demand is in the off - season, and the price is expected to be weak with oscillations [6]. - **Natural Rubber**: The macro - sentiment is strong, and the rubber price rebounds but is blocked near the pressure level. The implementation of zero - tariff policies for African products may have an impact on the market, but it needs further observation. The supply side is affected by the rainy season in Thailand, and the raw material price has rebounded recently. The demand side shows weak recovery in tire production, and the inventory problem has not been significantly improved. The downward trend may continue [6][7]. - **Synthetic Rubber**: The trading of butadiene is weak, which drags down the futures market. Although it rebounded slightly in the afternoon, the overall decline was small. The fundamentals have not changed much. The purchase of butadiene is expected to provide short - term support, and the futures market is expected to temporarily stabilize but still face pressure from above [8][9]. - **Cotton**: Driven by the improvement of macro - sentiment and the expectation of tight supply, the cotton price rebounds. The planting area of new cotton in Xinjiang is expected to increase, and the production may increase if there is no extreme weather. The demand side has weakened recently, and the inventory is decreasing faster than before, which may support the price in the short - term. In the long - term, the expected increase in new crop production will put pressure on the price [9]. - **Sugar**: The market is trading in advance the expectation of a loose global sugar market supply in the 25/26 crushing season. Brazil, India, Thailand, and China are all expected to have good production. Although the production data in the first half of May in Brazil decreased year - on - year, the overall optimistic expectation remains unchanged. In China, the production of the 24/25 crushing season has ended, with a high sales rate and low inventory, but there is pressure from subsequent arrivals. The sugar price is expected to be weak in the long - term and weak with oscillations in the short - term [11]. - **Paper Pulp**: The futures market moves horizontally, and the near - term contracts are weak. The supply - demand situation shows that the warehouse receipts are decreasing, the supply of broad - leaf pulp is abundant, the demand is weak, and there are news of strikes and price - holding by pulp mills. The previous rebound of the futures market was mainly due to the correction of the valuation of Russian needles, and now it is approaching the end of the correction. The overall supply - demand is weak, and the futures market is expected to oscillate [11]. - **Log**: As the delivery of the LG2507 contract approaches, the game between long and short positions intensifies, and the futures market fluctuates sharply. In the short - term, it is expected to be weak. Fundamentally, the supply of logs is accumulating, and the spot price is under pressure [12]. **Variety Data Monitoring** The document lists the data monitoring sections for various products such as oils and fats, protein meal, corn, livestock, rubber, cotton, sugar, paper pulp, and log, but specific data details are not fully presented in the text.

Report Industry Investment Rating No relevant content provided. Core Viewpoints of the Report - ICE cotton lacks fundamental upward drivers and is expected to maintain low - level fluctuations until there are new weather problems in US cotton - growing areas or significant changes in US trade agreements [4][16] - Domestic cotton futures follow the overall financial market sentiment. Concerns about tightening domestic cotton inventories drive the basis stronger, but if the downstream business situation deteriorates, the de - stocking momentum may slow, and the basis may not continue to rise. Cotton futures are also expected to maintain low - level fluctuations [1][16] Summary by Relevant Catalogs 1.行情数据 - ICE cotton main contract: opened at 65.16, reached a high of 66.70, a low of 64.71, and closed at 65.58, up 0.49 (0.75%). The trading volume was 131,983 lots, an increase of 48,661 lots, and the open interest was 111,792 lots, an increase of 543 lots [4] - Zhengzhou cotton main contract: opened at 13,305, reached a high of 13,395, a low of 13,200, and closed at 13,360, up 85 (0.64%). The trading volume was 678,385 lots, a decrease of 189,744 lots, and the open interest was 530,650 lots, a decrease of 15,282 lots [4] - Cotton yarn main contract: opened at 19,555, reached a high of 19,690, a low of 19,415, and closed at 19,630, up 105 (0.54%). The trading volume was 19,681 lots, a decrease of 14,623 lots, and the open interest was 12,592 lots, an increase of 7,506 lots [4] 2. 基本面 2.1 International Cotton Situation - **ICE cotton trend**: This week, it fluctuated within a narrow range with a weak overall trend. It once rebounded by over 2% on Monday due to a weaker US dollar and a sharp rise in crude oil prices but failed to sustain the upward momentum. Favorable weather in US cotton - growing areas is conducive to catching up with the sowing progress, causing it to fall again [4] - **US cotton weekly export sales data**: As of the week ending May 29, 2024/25 US upland cotton weekly contracts were 24,900 tons, a 7% weekly decrease and a 2% decrease from the four - week average. 2025/26 US upland cotton cumulative contracts were 303,200 tons, a 25% year - on - year decline. 2024/25 US upland cotton weekly shipments were 71,700 tons, a 15% month - on - month increase and a 1% increase from the four - week average [5] - **Other major cotton - producing and consuming countries**: - India: Sowing in northern India is going smoothly. The domestic market price shows a differentiated trend. About 80% - 85% of the estimated sowing area in northern India has been completed, and it is expected to finish all sowing by June 10 [6] - Brazil: The domestic textile industry has grown. The 2025 season's lint output in Mato Grosso is expected to reach a record high of 2.76 million tons. From January to April 2025, Brazilian textile production increased by 13.7% year - on - year, and the industry added 8,000 jobs [6] - Pakistan: Cotton import demand is low. The sowing progress in Sindh is far behind last year. The national cotton planting area is expected to reach 95% of last year's, with a preliminary estimated output of 6.5 - 7.5 million bales. The domestic market trading has slowed down, and import demand remains low [7] - Bangladesh: There are some positive news in energy and government budgets. Due to the approaching Eid al - Fitr holiday, textile enterprises' procurement pace has slowed down. The energy supply problem of textile enterprises may be alleviated, and the government has announced the next fiscal year's budget [8] - Australia: The 2024/25 lint output forecast has been raised to 1.2 million tons, an 11.1% increase from the previous forecast and about a 12% increase from the 2023/24 season [9] - **Southeast Asian textile industry startup rates**: As of the week ending June 6, India's textile enterprise startup rate was 74%, Vietnam's was 65%, and Pakistan's was 33.5% [9] 2.2 Domestic Cotton Situation - **Zhengzhou cotton futures and basis**: From May 30, domestic cotton futures and spot prices first fell and then rose. The spot trading was relatively light, but there were large local trading volumes. Some textile enterprises and traders continued to lock in cotton spot purchases. The cotton spot sales basis showed a stable - to - strong trend [10] - **Cotton warehouse receipts**: As of June 6, there were 10,870 registered warehouse receipts and 371 forecast warehouse receipts for No. 1 cotton, totaling 11,241 receipts, equivalent to 472,122 tons [10] - **Downstream market**: - Cotton yarn market: The market continued to be weak, with light trading. Weaving yarn performed better than knitting yarn. Cotton yarn prices continued to decline slightly, and spinning enterprises' profits continued to deteriorate. Spinning enterprise inventories continued to accumulate, and the startup rate decreased [11] - Cotton fabric market: The off - season atmosphere continued. After the Dragon Boat Festival, weavers' production enthusiasm was low, and production was controlled. The startup rate continued to decline, and subsequent orders were weak, with inventory rising [11] 3. 基础数据图表 - The report provides 14 charts, including those related to Xinjiang cotton cumulative processing volume, cotton commercial inventory, spinning enterprises' cotton inventory, etc., but no specific data analysis in the text [13][14][15] 4. 操作建议 - ICE cotton is expected to maintain low - level fluctuations until there are new factors. Domestic cotton futures are also expected to maintain low - level fluctuations, and the stability of cotton demand is based on low cotton prices [16]

Report Summary 1. Report Industry Investment Rating No relevant content provided. 2. Core Viewpoints - The Zhengzhou cotton market has been undergoing narrow - range oscillatory adjustments. The cotton spot price has slightly increased, while the downstream cotton yarn and cotton fabric markets are gradually weakening. Considering the macro - disturbances and the situation of both domestic and foreign markets, the cotton market has limited fluctuations in the near term, and it is advisable to adopt a range - trading strategy [7][8]. 3. Summary by Directory 3.1 Market Review and Operation Suggestions - **Market Review**: The Zhengzhou cotton has been in a narrow - range oscillatory adjustment. The latest 328 - grade cotton price index is 14,578 yuan/ton, up 6 yuan/ton from the previous trading day. The mainstream sales basis quotes for different types of cotton in Xinjiang vary. The atmosphere and prices in the pure - cotton yarn market have changed little, with a slight increase in traders' inventory and a certain reduction in spinners' inventory. The all - cotton grey fabric market remains dull, with slower shipment, increased inventory, and manufacturers offering volume - based discounts [7]. - **Operation Suggestions**: In the overseas market, the US cotton planting progress is slower than the same period last year, and the drought level has dropped to the 5 - year average. The external market is mainly oscillating within a wide - range. In the domestic market, the new cotton planting is generally in good condition, with the sown area expected to increase steadily. The downstream industry is gradually weakening. Given these factors, the cotton market has limited changes recently, and range trading is recommended [8]. 3.2 Industry News - As of the week ending May 25, the US cotton planting progress was 52%, lower than 57% in the same period last year and the 5 - year average of 56%. The budding rate was 3%, lower than 4% in the same period last year and the 5 - year average of 4%. - The India Cotton Association (CAI) expects India's cotton consumption in the 2024/25 season to be 30.7 million bales (170 kg per bale), a decrease of about 2% from the previous year, and has revised down the consumption forecast by 800,000 bales from the initial estimate [9].

1. Report Industry Investment Rating No relevant content provided. 2. Core Viewpoints of the Report - The cotton market is currently in a weak consolidation phase. The "Golden March and Silver April" consumption season in the domestic cotton market is nearing its end, and the overall market is rather quiet. With the unclear situation of Sino - US negotiations and the approaching May Day holiday, it is advisable to clear positions to avoid risks. The 09 contract is expected to oscillate within the range of 12,700 - 12,900 intraday [4]. - The cotton market has both positive and negative factors. Positive factors include the futures price approaching historical lows and the expectation of the "Golden March and Silver April" consumption peak. Negative factors are the decrease in foreign trade orders, increased inventory, US tariff hikes, stagnant exports to the US, and the European Union's import - restricting regulations [5]. 3. Summary According to the Table of Contents 3.1 Previous Day's Review No relevant content provided. 3.2 Daily Tips - **Fundamentals**: Sino - US mutual imposition of large - scale tariffs. In March, the textile industry's prosperity index rebounded to 52.47% above the boom - bust line. USDA reported a reduction in April consumption and an increase in inventory, which is slightly bearish. ICAC's April report predicted a production increase compared to the previous month, stable consumption, and a slight increase in ending inventory, also slightly bearish. In March, China's textile and clothing exports increased by 12.4% year - on - year. In March, China imported 70,000 tons of cotton, a 81.4% year - on - year decrease, and 130,000 tons of cotton yarn, a 31% year - on - year decrease. The Ministry of Agriculture estimated a 2024/2025 production of 6.16 million tons, imports of 1.5 million tons, consumption of 7.6 million tons, and ending inventory of 8.31 million tons, which is bearish [4]. - **Basis**: The national average price of spot 3128b cotton is 14,232 yuan, with a basis of 1392 yuan (for the 09 contract), indicating a premium over futures, which is bullish [4]. - **Inventory**: The Ministry of Agriculture's April 2024/2025 forecast for China's ending inventory is 8.31 million tons, which is bearish [4]. - **Market Chart**: The 20 - day moving average is downward, and the K - line is below the 20 - day moving average, which is bearish [4]. - **Main Position**: The position is bearish, with a net short position increase, and the main trend is bearish [4]. 3.3 Today's Focus No relevant content provided. 3.4 Fundamental Data - **Global Cotton Supply - Demand Balance**: The table shows cotton production, consumption, and other data of various countries from 2020/21 to 2024/25. For example, in 2024/25 (April), China's cotton production is 696.7 million tons, an increase of 5.4 million tons from the previous month, with a year - on - year increase of 17% [10]. - **China's Cotton Supply - Demand Balance**: The table presents China's cotton supply - demand data from 2022/23 to 2024/25. In 2024/25 (April forecast), production is 6.16 million tons, imports are 1.5 million tons, consumption is 7.6 million tons, and ending inventory is 8.31 million tons [19]. 3.5 Position Data No relevant content provided.