1. Report Industry Investment Rating - The report gives a bearish outlook on the cotton industry, expecting short - term weak and volatile trends [5]. 2. Core Viewpoint of the Report - New cotton is about to be listed in large quantities with strong expectations of a bumper harvest, which exerts pressure on cotton prices. On the other hand, the industrial chain inventory has dropped to a low level, and the domestic cotton commercial inventory is at a historical low. Seasonal replenishment provides support at the bottom. It is expected to be mainly weak and volatile in the short - term, with support at around 13,500 yuan/ton. It is advisable to wait and see on a single - side basis and buy far - month contracts after the market drops to an appropriate level [5]. 3. Summary According to the Directory 3.1 01 Week - on - Week Core Points and Strategies - **Supply**: The 2025/26 US cotton production is 2.879 million tons, a year - on - year decrease of 8.2%, with the final output estimated to be between 2.85 - 3 million tons. The 2025/26 Chinese cotton production is 7.08 million tons, a year - on - year increase of 1.5%, and there is still room for the USDA to raise its forecast [5]. - **Demand**: The 2025/26 Chinese cotton consumption is 8.38 million tons, a year - on - year decrease of 1.2%. Domestic downstream consumption is sluggish, but there are signs of marginal improvement in current downstream orders. As of September 19, the spinning mill operating rate is 66.6% (66.5% last week), and the weaving mill operating rate is 37.9% (38% last week) [5]. - **Inventory**: As of the end of August, the domestic cotton commercial inventory is 1.4817 million tons, a decrease of 708,100 tons from the end of July and a year - on - year decrease of 30.9%. As of September 19, the raw material inventory available days of textile enterprises is 10.86 days (11.63 days last week), and the yarn inventory days of spinning mills is 30.4 days (30.6 days last week) [5]. - **Warehouse Receipts**: As of September 19, the registered warehouse receipts of Zhengzhou cotton are 4,232, with 12 valid forecasts, and the total of warehouse receipts and valid forecasts is 169,700 tons (200,600 tons on September 12) [5]. - **Basis**: As of September 19, the spot price of Xinjiang cotton is 15,250 yuan/ton, the closing price of the main CF2601 contract is 13,735 yuan/ton, and the Xinjiang cotton basis is 1,515 yuan/ton [5]. - **Cost**: The overall planting cost of self - owned land has decreased slightly. The cost of cotton planting on rented land is equivalent to a seed cotton price of 6.0 - 6.2 yuan/kg, equivalent to about 13,500 - 13,600 yuan/ton on the futures market. The overall average cost of ginning plants in the new year is expected to be 14,700 - 14,800 yuan/ton, and the opening purchase price is not expected to be high [5]. - **Macro**: In the US, the number of initial jobless claims last week dropped significantly to 231,000, a decrease of 32,000 from the previous week, the largest decline in nearly four years. Retail sales in August showed strong growth, but tariffs and a weak employment market pose downward risks. The US consumer confidence index in September continued to decline, reaching the lowest level since May. On September 17, the Fed cut interest rates by 25 basis points. In China, waiting for the Politburo meeting in October, domestic demand - side policies are continuously strengthening, which is expected to support the medium - and long - term demand for domestic cotton [5]. 3.2 02 Week - on - Week Data Charts 3.2.1 Global Cotton Supply - Demand Balance Sheet (USDA) - In 2025/26, the global cotton production is 25.62 million tons, a year - on - year decrease of 1.3%, and the total consumption is 25.87 million tons, a year - on - year decrease of 0.26% [9]. 3.2.2 US Cotton Supply - Demand Balance Sheet (USDA) - In 2025/26, the US cotton production is 2.879 million tons, a year - on - year decrease of 8.2%, with the final output estimated to be between 2.85 - 3 million tons. Consumption is 370,000 tons, remaining flat year - on - year [10]. 3.2.3 Chinese Cotton Supply - Demand Balance Sheet (USDA) - In 2025/26, Chinese cotton production is 7.08 million tons, a year - on - year increase of 1.5%, and there is still room for the USDA to raise its forecast. Consumption is 8.38 million tons, a year - on - year decrease of 1.2% [11]. 3.2.4 Chinese Cotton Supply - Demand Balance Sheet (BCO) - In 2025/26, the estimated production is 7.42 million tons, close to the general expectation of 7.5 million tons. Imports are expected to increase by 34% year - on - year, different from the USDA's forecast of flat imports. Consumption is similar to the USDA data, showing a slight year - on - year decrease, not overly pessimistic. The inventory - to - consumption ratio is expected to increase by 6.03% year - on - year [13]. Other Data - **Domestic New - Year Planting**: The new - year planting area has expanded, maintaining a pattern of loose supply. According to different surveys from February to June, the national planting area and Xinjiang planting area show varying degrees of year - on - year increases, while the national and Xinjiang cotton yields show different degrees of year - on - year decreases [19]. - **Cotton and Yarn Imports**: Cotton import volume is low, and spinning enterprises are looking forward to import quotas [21]. - **Enterprise Inventories**: As of September 19, the raw material inventory available days of textile enterprises is 10.86 days (11.63 days last week), and the yarn inventory days of spinning mills is 30.4 days (30.6 days last week) [27]. - **Enterprise Operating Rates**: As of September 19, the spinning mill operating rate is 66.6% (66.5% last week), and the weaving mill operating rate is 37.9% (38% last week) [5]. - **Chinese Cotton Commercial Inventory**: As of the end of August, the domestic cotton commercial inventory is 1.4817 million tons, a decrease of 708,100 tons from the end of July and a year - on - year decrease of 30.9%, at a historical low [39].

Report Overview - Report Title: Cotton Futures Weekly Review - Date: September 20, 2025 - Researcher: Wang Zijian - Contact: 17803978037 - Futures Practitioner Qualification Number: F03087965 - Futures Trading Consultation Number: Z0019551 1. Report Industry Investment Rating No relevant content provided. 2. Report's Core View - Internationally, the Fed's 25bp rate cut met market expectations. The 2025/26 global cotton market will have a 250,000 - ton supply - demand gap. The supply in the international cotton market is tightening, driving cotton prices to remain strong [4]. - Domestically, the domestic cotton market is in the critical period of new cotton harvesting, with the price center moving down. New cotton listing pressure is digesting the support effect of reduced old - cotton inventory, and domestic cotton prices will face seasonal downward pressure in the short term [5]. 3. Summary by Related Catalogs 3.1 International Market - **Supply - demand situation**: The 2025/26 global cotton market will have a 250,000 - ton supply - demand gap (production of 25.62 million tons/consumption of 25.87 million tons), with production decreasing by 340,000 tons year - on - year and consumption decreasing by 70,000 tons year - on - year. Brazil's cotton harvesting is over 60% and processing is 20%. US new cotton boll opening rate is 40%, 12 percentage points faster week - on - week but 4 percentage points lower than last year, and the picking progress is 8%, 1 percentage point higher than last year. In early September, US cotton export contracts decreased by 26,200 tons to 29,700 tons, and shipments decreased by 5,300 tons to 30,800 tons. Uzbekistan plans to boost the cotton textile industry through industrial subsidy policies [4]. - **US cotton data**: In September 2025, the US cotton planting area was 56.427 million mu, up 115,000 mu month - on - month; the harvest area was 44.729 million mu, up 79,000 mu month - on - month; the abandonment rate was 20.7%, with little change. The yield per unit was expected to be 64.3 kg/mu, slightly decreasing month - on - month; the production was expected to be 2.879 million tons, up 2,000 tons month - on - month. Consumption was expected to be 370,000 tons, and exports were expected to be 2.613 million tons, with no significant changes. The ending inventory remained at 784,000 tons [14]. - **US cotton growth progress**: As of September 14, the US cotton boll opening rate was 50%, 3 percentage points behind last year and 1 percentage point ahead of the five - year average. The picking progress was 9%, 1 percentage point behind last year and 1 percentage point ahead of the five - year average. In the main producing area of Texas, the boll opening rate was 46%, the same as last year and 1 percentage point ahead of the five - year average; the picking progress was 21%, the same as last year and 4 percentage points ahead of the five - year average [16]. - **US drought situation**: As of September 9, the area of drought - affected regions in the US accounted for 35.9%, 1.2 percentage points higher than the previous week. About 32% of cotton - planting areas in the US were affected by drought, 2 percentage points higher than the previous week. In Texas, about 7% of cotton - planting areas were affected by drought, 4 percentage points higher than the previous week [19]. - **US cotton export**: As of September 11, 2025, the US had cumulatively signed net export contracts for 925,000 tons of 2025/26 cotton, reaching 35.40% of the annual expected exports, and had cumulatively shipped 188,000 tons, with a shipment rate of 20.27%. China had cumulatively signed contracts to import 17,000 tons of US cotton, accounting for 1.81% of the signed US cotton contracts, and had cumulatively shipped 363 tons, accounting for 0.19% of the total US cotton shipments and 2.17% of China's signed contracts [28]. 3.2 Domestic Market - **Supply situation**: The domestic cotton market is in the new cotton harvesting period. Xinjiang and other main producing areas' new cotton is in the boll - opening stage, and mechanical harvesting is expected to start next week. Mainstream institutions predict that the domestic cotton production in 2025 will exceed 7 million tons. As of September 11, the national new cotton picking progress was 0.3%, 0.1 percentage points higher than last year but 0.1 percentage points lower than the four - year average. The initial inventory decreased by 110,000 tons to 6.13 million tons. Due to the increase in cotton - planting area in Xinjiang and a slight increase in yield per unit, the national total production was increased by 520,000 tons to 7.42 million tons this month. The annual import volume remained at 1.4 million tons [5][26]. - **Demand situation**: The downstream demand is under pressure. The effect of textile industry's rush - to - export has faded, and overseas orders have shrunk. In August, textile and clothing exports were 26.5 billion US dollars, a year - on - year decrease of 5%. From January to August, cumulative exports were 197.2 billion US dollars, a year - on - year decrease of 0.2%. The new - year textile production capacity in Xinjiang will increase steadily, and the overall textile cotton demand will remain high. The annual textile cotton consumption expectation was increased by 120,000 tons to 8.02 million tons this month, and other consumption and exports remained at 380,000 tons and 20,000 tons respectively [5][26]. - **Market structure**: The old - cotton inventory is continuously consumed, supporting high spot prices, but textile enterprises' purchasing willingness is low, resulting in a situation of high prices but few transactions in the spot market [5]. - **Spinning enterprises situation**: Small and medium - sized spinning enterprises maintain a low operating rate, and the market demand is difficult to support the recovery of the operating rate. Large and medium - sized spinning enterprises with stable customer groups have relatively stable orders and a high operating rate, but yarn prices are difficult to rise, and enterprises have difficulty in making profits, mainly selling at a loss. The operating rates of spinning mills in various regions are basically stable. Large spinning mills in Xinjiang operate at about 90%, large enterprises in Henan operate at an average of 60% - 70%, and large spinning mills in Jiangsu, Zhejiang, Shandong, and Anhui along the Yangtze River operate at an average of 60% - 70% [30]. - **Commercial inventory**: As of August 2025, China's domestic cotton commercial inventory was 1.4817 million tons, a month - on - month decrease of 338,500 tons, and it was at a historically low level seasonally [32]. 3.3 USDA Data - **Global cotton supply - demand forecast**: In the 2025/26 global cotton supply - demand forecast, production increased month - on - month, consumption increased month - on - month, and import and export trade volumes both increased slightly. Due to the decrease in initial inventory, the ending inventory decreased again this year. In the 2024/25 supply - demand forecast, global cotton production and consumption increased, and the ending inventory decreased again because the increase in consumption was greater than that in production [13].

Report Industry Investment Rating - The industry is expected to fluctuate, with a long - term upward trend [3][5] Core Viewpoints - Short - and medium - term, cotton prices may rebound from September 15th to October 15th and then decline due to increased supply and hedging pressure. The CF2601 futures price will range from 13,300 to 14,500. Long - term, cotton prices are expected to rise due to potential domestic supply - demand tightness, global supply - demand balance, and favorable macro - policies [5]. - Cotton yarn prices are expected to strengthen in the near term due to the approaching consumption season and the expected mild increase in cotton prices [7]. Summaries by Directory 01. Weekly View - Cotton - Short - and medium - term, new cotton purchase is likely to be stable. Prices may rebound from September 15th to October 15th and then decline. The CF2601 futures price will range from 13,300 to 14,500. Long - term, prices are expected to rise due to potential supply - demand tightness and favorable policies [5]. 02. Weekly View - Cotton Yarn - This week, Zhengzhou cotton and cotton yarn markets fluctuated. The cotton yarn market had average trading, with low - count yarns performing better. Inner - region spinning mills are still in cash - flow losses. Prices are expected to strengthen in the near term [7]. 03. Market Review - Cotton market: Zhengzhou cotton was weak. Many cotton merchants have low inventories, and some old cotton remains unsold. Spinners purchase cotton based on rigid demand, waiting for new cotton purchase guidance. New cotton output is expected to increase, bringing long - term pressure. - Cotton yarn market: Trading was average, worse than previous years. Low - count yarns performed better. Inner - region spinning mills are in cash - flow losses and lack confidence [11]. 04. International Macroeconomics - The US released a series of economic data, including manufacturing PMI, employment, trade, and inflation data. The eurozone also released data on unemployment, inflation, and GDP [12]. 05. Domestic Macroeconomics - China released data on foreign exchange reserves, CPI, PPI, M2, social financing, and new RMB loans [14]. 06. Global Supply - Demand Balance Sheet - In the 2025/26 and 2024/25 cotton seasons, global cotton supply, consumption, and trade volume have different adjustments, and the ending inventory has decreased [15]. 07. Domestic Supply - Demand Balance Sheet - In the 2024/25 season, total supply decreased, total demand increased, and ending inventory decreased. In the 2025/26 season, total supply decreased, total demand was stable, and ending inventory decreased [20]. 08. US Cotton Exports - As of September 4, 2025, the US had cumulatively signed 882,000 tons of cotton exports for the 2025/26 season, with a shipment rate of 18.11%. China had signed 16,000 tons, with a shipment rate of 2.30% [23]. 09. Industrial and Commercial Inventories - As of July 31, industrial and commercial inventories totaled 308.82 million tons, a year - on - year decrease of 497,000 tons. As of August 15, they totaled 274.44 million tons, a decrease of 343,800 tons from July [26]. 10. July Cotton and Cotton Yarn Imports - In July 2025, China's cotton imports were 50,000 tons, a year - on - year decrease of 73.2%. Cotton yarn imports were 110,000 tons, a year - on - year decrease of 16.4% [29]. 11. August Cotton Yarn Production and Sales - In August, the cotton yarn market improved. Production was 424,000 tons, a year - on - year increase of 11.8% and a month - on - month decrease of 2.3%. The cumulative production from January to August was 3.428 million tons, a year - on - year increase of 2.7% [33]. 12. US Cotton Growth - As of September 7, the boll - setting rate was 97%, the boll - opening rate was 40%, the harvesting rate was 8%, and the good - quality rate was 54%. Growth was accelerating, and the expected output was higher than the USDA forecast [36]. 13. US Cotton Weather - As of September 9, the drought index in the US cotton - growing area was rising but still lower than the five - year average. Cotton growth was accelerating [39]. 14. Xinjiang Cotton Growth - As of September 8, the boll - opening rate in Xinjiang was 47.5%. Northern Xinjiang will start machine - harvesting around September 20, and southern Xinjiang's hand - picked cotton is being harvested [41]. 15. Textile Industry Inventory - In July, the textile industry's inventory was 402.01 billion yuan, a month - on - month increase of 0.12% and a year - on - year increase of 0.49% [42]. 16. Domestic Demand - In July 2025, social consumer goods retail sales were 3.878 trillion yuan, a year - on - year increase of 3.7%. Clothing and textile retail sales were 96.1 billion yuan, a year - on - year increase of 1.8% [47]. 17. External Demand - In July 2025, China's textile and clothing exports were 26.766 billion US dollars, a year - on - year decrease of 0.06% [50]. 18. US Clothing Retail Sales in June 2025 - In June 2025, US clothing and accessory retail sales were 26.342 billion US dollars, a year - on - year increase of 3.88% [53]. 19. US Cotton Product Imports in June - In June 2025, US cotton product imports were 1.357 billion square meters, a year - on - year decrease of 4.47%. Textile and clothing imports were 8.564 billion square meters, a year - on - year increase of 2.45% [57]. 20. Warehouse Receipts - As of September 12, the number of warehouse receipts was 5,017, a decrease of 142 from last week [60]. 21. Non - Commercial Positions - As of September 9, the non - commercial net long positions in ICE cotton futures decreased [63]. 22. Spinning Mill Load - As of September 12, the load index of pure cotton spinning mills was 64.5, unchanged from last week [66]. 23. Weaving Mill Load - As of September 12, the load index of all - cotton grey fabric mills increased, and the yarn load continued to recover [70]. 24. Industry Chain Inventory - Textile enterprises' cotton, cotton yarn, and all - cotton grey fabric inventories decreased, indicating market improvement [74]. 25. Industry Chain Profit - The profit of cotton yarn improved slightly. Inner - region spinning mills' C32S cash - flow loss was about 300 yuan/ton [80]. 26. Basis - The basis remained high. The basis of pre - sold new cotton was 800 - 1000 yuan/ton [81]. 27. Domestic - Foreign Cotton Price Spread - Currently, domestic cotton is stronger than foreign cotton. The situation may change in November - December [84]. 28. Inter - Month Spread - The 11 - 1 month spread was - 150 yuan/ton. It is recommended to short 11 - month and long 1 - month contracts [89].

Report Industry Investment Rating - The report gives a "Shock Operation" rating for the cotton textile industry [3] Core Viewpoints - In the short - term, after the September 3rd Victory Day parade in China, the stock market dropped. The August PMI manufacturing index rebounded but remained below 50%. Enterprise profits turned positive. Next week, the CF2601 contract is expected to oscillate or start a rebound test in the range of [13920 - 14255]. In the medium - term, new cotton will be on the market after September 20th. The expected purchase price of ginned cotton mills is 6 - 6.3 yuan/ton. Pre - sales of new cotton have increased significantly. With the approaching of the "Golden September and Silver October", there is a possibility of price support or rebound, but high inventories of grey cloth and yarn limit the rebound height. In the long - term, after new cotton is on the market, prices may first rise and then fall, and next year the market is expected to be shock - strong due to the expected interest rate cuts [6] - For cotton yarn, this week, Zhengzhou cotton prices adjusted, and the cotton yarn market also followed. The trading volume of pure cotton yarn is average, and low - count yarns perform better. Inland spinning enterprises are still in cash - flow losses and lack confidence in the future. With the approaching of the "Golden September and Silver October", prices are expected to strengthen [8] Summaries by Directory 01. Weekly Viewpoint - Cotton - Short - term: After the parade, the stock market fell. The PMI index rebounded but was below 50%. Next week, expect oscillations or a rebound test in the [13920 - 14255] range for CF2601 [6] - Medium - term: New cotton will be on the market after September 20th. Pre - sales have increased. The "Golden September and Silver October" may support prices, but high inventories limit the rebound [6] - Long - term: New cotton prices may first rise and then fall. Next year, the market may be shock - strong due to expected interest rate cuts [6] 02. Weekly Viewpoint - Cotton Yarn - This week, Zhengzhou cotton prices adjusted, and the cotton yarn market followed. Low - count yarns perform better. Inland spinning enterprises are in losses. With the approaching of the "Golden September and Silver October", prices may strengthen [8] 03. Market Review - Zhengzhou cotton is still weak. Macro - risk aversion is strong. Cotton merchants' inventories are low, and some old cotton remains unsold. Spinning enterprises purchase raw materials on a need - basis. New cotton production is expected to increase slightly, bringing long - term pressure. The trading volume of pure cotton yarn is average, and low - count yarns perform better. Inland spinning enterprises are in cash - flow losses [12] 04. International Macro - US economic data shows that in September 2025, the ISM manufacturing PMI was 48.7, ADP employment decreased, exports increased, imports increased, and the trade deficit widened. Eurozone data shows that the unemployment rate decreased, CPI increased, and PPI increased [13] 05. Domestic Macro - Upcoming domestic economic data to be released includes foreign exchange reserves, CPI, PPI, M2 money supply, social financing scale, and new RMB loans [15] 06. Global Supply - Demand Balance Sheet - According to the USDA's August report, in the 2025/26 season, global cotton production, consumption, and trade volume decreased month - on - month, and the ending inventory decreased. In the 2024/25 season, production decreased, consumption increased, exports decreased, and the ending inventory decreased again [17] 07. Domestic Supply - Demand Balance Sheet - In the 2024/25 season, the total supply decreased due to a decrease in imports. The total demand increased due to an increase in cotton consumption. The ending inventory decreased by 120,000 tons. In the 2025/26 season, the total supply decreased slightly, the total demand remained stable, and the ending inventory decreased by 100,000 tons [22] 08. US Cotton Exports - As of August 14, 2025, the US had cumulatively signed 755,000 tons of cotton exports for the 2025/26 season, with a signing rate of 28.88% and a shipment rate of 8.49%. China had signed 3,000 tons and shipped 181 tons [25] 09. Industrial and Commercial Inventories - At the end of July, the national commercial cotton inventory was 2.1898 million tons, a decrease of 22.62% from the previous month and 21.18% from the same period last year. As of August 15, the commercial inventory was 1.8202 million tons, a decrease of 16.88% from the end of July. Industrial inventories also changed accordingly [28] 10. Cotton and Cotton Yarn Imports - In July 2025, China's cotton imports were 50,000 tons, a year - on - year decrease of 73.2%. From January to July, cumulative imports were 520,000 tons, a year - on - year decrease of 74.2%. Cotton yarn imports in July were 110,000 tons, a year - on - year decrease of 16.4% [31] 11. Cotton Yarn Production and Sales - In August, the cotton yarn market improved, especially in the second half of the month. The profit of spinning enterprises improved, but the operating rate did not increase significantly. The estimated production of pure cotton yarn in August was 424,000 tons, a year - on - year increase of 11.8% and a month - on - month decrease of 2.3% [35] 12. US Cotton Growth - As of August 31, the boll - setting rate of US cotton was 90%, 4 percentage points slower than last year and 3 points slower than the five - year average. The flocculation rate was 28%, 7 points slower than last year and 2 points slower than the average. The excellent - good rate was 51%, 7 points higher than last year and 8 points higher than the average [38] 13. US Cotton Weather - As of September 2, the drought index in the US cotton - growing areas increased, but most cotton had completed boll - setting and entered the flocculation stage, so the impact on growth was limited [42] 14. Xinjiang Cotton Growth - As of September 1, the average flocculation rate in Xinjiang was 27.7%, an increase of 12.4 percentage points. Some cotton fields have started spraying defoliants, and new cotton is expected to be on the market 10 - 15 days earlier than usual [44] 15. Textile Industry Inventory - In July, the inventory of the textile industry increased by 0.12% month - on - month and 0.49% year - on - year. The finished - product inventory of the textile industry decreased by 0.03% month - on - month and increased by 1.31% year - on - year. Textile and clothing inventories changed accordingly [45] 16. Domestic Demand - In July 2025, the total retail sales of consumer goods were 3.878 trillion yuan, a year - on - year increase of 3.7%. The retail sales of clothing, shoes, hats, and textiles were 96.1 billion yuan, a year - on - year increase of 1.8% [50] 17. External Demand - In July 2025, China's textile and clothing exports were 26.766 billion US dollars, a year - on - year decrease of 0.06%. From January to July, cumulative exports were 170.741 billion US dollars, a year - on - year increase of 0.63% [53] 18. US Clothing Retail - In June 2025, the retail sales of US clothing and accessories were 26.342 billion US dollars, a year - on - year increase of 3.88% and a month - on - month increase of 0.94% [56] 19. US Cotton Product Imports - In June 2025, US cotton product imports were 1.357 billion square meters, a year - on - year decrease of 4.47% and a month - on - month increase of 5.32%. Textile and clothing imports also changed [60] 20. Warehouse Receipts - As of September 4, the number of warehouse receipts was 5,829, a decrease of 167 from the previous week [62] 21. Non - Commercial Positions - As of August 26, the net long positions of non - commercial futures and options in the ICE cotton futures market decreased by 2,829 to - 40,128. The net long positions of non - commercial futures alone decreased by 2,501 to - 37,606. The net long positions of commodity index funds decreased by 513 to 59,842 [66] 22. Textile Factory Load - As of September 5, the load index of pure cotton yarn mills was 64.5, unchanged from the previous week; the load of rayon yarn mills was 50, unchanged; the load of pure polyester yarn mills was 54.5, an increase of 0.1 from the previous week [70] 23. Weaving Factory Load - The load index of all - cotton grey cloth mills increased by 0.3 to 46.5, the load index of rayon cloth mills increased by 1.0 to 55.5, and the comprehensive load of short - fiber cloth mills increased by 0.2 to 49.3 [74] 24. Industry Chain Inventory - Textile enterprises' cotton inventory decreased by 0.7 days to 29.7 days, cotton yarn inventory decreased by 0.4 days to 28.1 days, and all - cotton grey cloth inventory decreased by 0.9 days to 33.5 days [78] 25. Industry Chain Profits - This week, Zhengzhou cotton prices oscillated after a rebound. The cotton yarn market improved slightly, but the price increase was limited. Inland spinning enterprises for C32S were still in losses of about 500 yuan/ton, while Xinjiang enterprises still had a small profit [83] 26. Basis - This week, the basis weakened significantly with the rebound of futures prices. The current inland basis is 1,033 yuan/ton, a decrease of 505 yuan/ton from the previous week. The new cotton pre - sale basis is 800 - 1000 yuan/ton [86] 27. Domestic and Foreign Cotton Price Spread - Currently, the domestic cotton market is stronger than the foreign market. After October, if China increases foreign cotton imports or conducts state reserves sales, the situation may change [89] 28. Inter - Month Spread - The 9 - 11 spread weakened to - 300 yuan/ton, approaching the target. The 11 - 1 spread first weakened to - 230 yuan/ton and then strengthened to - 125 yuan/ton. A strategy of shorting 11 and going long 1 is recommended [92]

Report Title - "High-level Fluctuations, Awaits New Cotton Listing" [1] Report Industry Investment Rating - No relevant content provided Core Viewpoints - The cotton market is expected to fluctuate strongly in the short term due to tight spot markets, an improved macro - environment, and consumption expectations for the "Golden September and Silver October." As new cotton is set to be listed in late September with a significant increase in production, there will be a game between cotton farmers and ginners. It is predicted that ginners will purchase relatively cautiously, and there will be greater pressure when a large amount of new cotton is listed around the National Day. The price in September is expected to fluctuate at a high level, and enterprises can seize the opportunity to hedge for new cotton. The basis is expected to remain strong. The cotton yarn market mainly follows cotton prices but faces greater pressure later due to intense industrial chain competition and declining exports [61]. Summary by Directory 1. Market Trend Review - In August, Zhengzhou cotton prices fluctuated at a high level. The tight spot market supported prices, while the expected large increase in Xinjiang cotton production in the new year suppressed the market. Macro - factors such as the Fed's interest - rate cut expectations, a phased Sino - US agreement, and an improved domestic macro - environment were favorable for commodity prices. With the consumption expectations of the "Golden September and Silver October," cotton prices remained high. Cotton yarn mainly followed cotton prices, but due to obvious over - capacity, spinning profits were significantly compressed, and the pressure would increase with the continued expansion of Xinjiang's production capacity [7]. 2. Supply - side Analysis 2.1 Global Supply - Demand Balance - According to the USDA's August global cotton supply - demand forecast report, in the 2025/26 season, global cotton production, consumption, import, and export volumes were all adjusted downward month - on - month, and the ending inventory decreased. In the 2024/25 season, the total global cotton production was expected to be adjusted downward month - on - month, consumption to increase, and exports to decrease, and the ending inventory declined again. In 2025/26, the expected global cotton production was 2539.2 million tons, a month - on - month decrease of 39.1 million tons (1.5%); consumption was 2568.8 million tons, a month - on - month decrease of 3.0 million tons (0.1%); imports were 948.9 million tons, a month - on - month decrease of 23.9 million tons (2.5%); exports were 949.0 million tons, a month - on - month decrease of 24.0 million tons (2.5%); and the global ending inventory was 1609.3 million tons, a month - on - month decrease of 74.2 million tons (4.4%) [13]. 2.2 US Cotton - In 2025/26, the US cotton planting area was 56.311 million mu, a month - on - month decrease of 5.117 million mu; the harvested area was 44.65 million mu, a month - on - month decrease of 7.928 million mu; the abandonment rate was 20.7%, a month - on - month increase of 6.3 percentage points. The expected yield per mu was 64.4 kg, a month - on - month increase of 4.0 kg; the production was 2.877 million tons, a month - on - month decrease of 302,000 tons. Consumption was expected to be 370,000 tons with no obvious month - on - month adjustment; exports were expected to be 2.613 million tons, a month - on - month decrease of 109,000 tons. The ending inventory decreased by 218,000 tons to 784,000 tons [14]. 2.3 Indian Cotton - According to the Indian Cotton Association's July supply - demand balance sheet, in the 2023/24 season, the expected production was 5.72 million tons, a month - on - month increase of 190,000 tons (3.4%); imports were expected to be 258,000 tons, a month - on - month decrease of about 40,000 tons (13.1%). There was no obvious month - on - month adjustment in demand data, and the ending inventory increased by 153,000 tons to 666,000 tons, a month - on - month increase of 29.8%. In the 2024/25 season, the beginning inventory increased to 666,000 tons, and there was no obvious month - on - month adjustment in production and import expectations, which were 5.294 million tons and 663,000 tons respectively. In terms of demand, the expected consumption was 5.338 million tons, a month - on - month increase of 102,000 tons (1.9%); exports were expected to be 306,000 tons, a month - on - month increase of 17,000 tons (5.9%). The ending inventory increased by 34,000 tons to 979,000 tons, a month - on - month increase of 3.6% [20]. 2.4 Brazilian Cotton - CONAB's 2024/25 cotton production forecast data showed that the expected cotton - planting area in Brazil was 2.086 million hectares (about 31.29 million mu), a year - on - year increase of 7.3%; the expected national yield per mu was 125.8 kg, a year - on - year decrease of 0.9%. Based on this, the expected total cotton production in Brazil in 2024/25 was 3.935 million tons, a year - on - year increase of 6.3%. In the 2024/25 season, Brazil exported 2.835 million tons of cotton, a year - on - year increase of 5.8%, setting a new record, and it remained the world's largest cotton exporter, with cumulative revenue of about $4.85 billion. Brazilian cotton was mainly exported to Vietnam, Pakistan, and China, totaling 1.48 million tons [23]. 2.5 Domestic Supply - In the 2025/26 season, the beginning inventory decreased by 120,000 tons to 6.24 million tons. In terms of production, Xinjiang's production increased by 120,000 tons to 6.59 million tons month - on - month, and inland production decreased by 3,000 tons to about 310,000 tons, with the national total production increasing by about 120,000 tons to 6.9 million tons month - on - month. Imports were expected to continue to decrease by 100,000 tons to 1.4 million tons. The total annual supply decreased by 100,000 tons to 14.54 million tons. In terms of total demand, the overall textile cotton demand would remain stable at a relatively high level. The expected annual textile cotton consumption was maintained at 7.9 million tons, and other consumption and exports remained unchanged at 380,000 tons and 20,000 tons respectively, with total demand stable at 8.3 million tons [24]. 2.6 Inventory and Imports - At the end of July, the national commercial cotton inventory was 2.1898 million tons, a decrease of 640,000 tons (22.62%) from the previous month and 588,400 tons (21.18%) lower than the same period last year. As of the end of July, the textile enterprises' in - stock industrial cotton inventory was 898,400 tons, a decrease of 4,600 tons from the end of the previous month. The disposable cotton inventory of textile enterprises was 1.2062 million tons, a decrease of 9,400 tons from the end of the previous month. The total industrial and commercial inventory was 3.0882 million tons, a year - on - year decrease of 497,000 tons. As of August 15, the national commercial cotton inventory was 1.8202 million tons, a decrease of 369,600 tons (16.88%) from the end of July. As of August 15, the textile enterprises' in - stock industrial cotton inventory was 924,200 tons, an increase of 25,800 tons from the end of the previous month. The disposable cotton inventory of textile enterprises was 1.2345 million tons, an increase of 28,300 tons from the end of the previous month. The total industrial and commercial inventory was 2.7444 million tons, a decrease of 343,800 tons from the end of July. In July 2025, China imported 50,000 tons of cotton, a month - on - month increase of 20,000 tons (66.7%) and a year - on - year decrease of 150,000 tons (73.2%). From January to July 2025, China imported 520,000 tons of cotton cumulatively, a year - on - year decrease of 74.2%. In the 2024/25 season (from September 2024 to August 2025), the cumulative cotton imports were 1 million tons, a year - on - year decrease of 67.8%. In July 2025, China imported 110,000 tons of cotton yarn, a year - on - year decrease of about 20,000 tons (16.4%); from January to July 2025, the cumulative cotton - yarn imports were 780,000 tons, a year - on - year decrease of 14%. In the 2024/25 season (from September 2024 to July 2025), the cumulative cotton - yarn imports were about 1.28 million tons, a year - on - year decrease of 17.95% [26][31]. 3. Demand - side Analysis 3.1 Domestic Demand - In July 2025, the total retail sales of consumer goods were 3.878 trillion yuan, a year - on - year increase of 3.7% and a month - on - month decrease of 8.29%. From January to July 2025, the total retail sales of consumer goods were 28.4238 trillion yuan, a year - on - year increase of 4.8%. In July, the retail sales of clothing, footwear, and textile products were 96.1 billion yuan, a year - on - year increase of 1.8% and a month - on - month decrease of 24.63%. From January to July, the cumulative retail sales were 837.1 billion yuan, a year - on - year increase of 2.9% [38]. 3.2 Foreign Demand - In July 2025, China exported $26.766 billion worth of textiles and clothing, a year - on - year decrease of 0.06% and a month - on - month decrease of 2.01%. Among them, textile exports were $11.604 billion, a year - on - year increase of 0.55% and a month - on - month decrease of 3.69%; clothing exports were $15.162 billion, a year - on - year decrease of 0.55% and a month - on - month decrease of 0.69%. From January to July 2025, China exported $170.741 billion worth of textiles and clothing, a year - on - year increase of 0.63%. Among them, textile exports were $82.122 billion, a year - on - year increase of 1.6%; clothing exports were $88.619 billion, a year - on - year decrease of 0.3% [41]. 3.3 Textile Industry Inventory - In June, the inventory of the textile industry was 401.53 billion yuan, a month - on - month increase of 0.30% and a year - on - year increase of 1.12%. The finished - product inventory of the textile industry was 215.3 billion yuan, a month - on - month increase of 1.18% and a year - on - year increase of 2.42%. The inventory of textile and clothing was 187.98 billion yuan, a month - on - month increase of 0.78% and a year - on - year decrease of 0.36%. The finished - product inventory of textile and clothing was 99.31 billion yuan, a month - on - month increase of 2.25% and a year - on - year increase of 1.68% [43]. 3.4 US Retail Sales and Inventory - In June 2025, the retail sales of clothing and clothing accessories in the US (seasonally adjusted) were $26.342 billion, a year - on - year increase of 3.88% and a month - on - month increase of 0.94%. In May 2025, the inventory of clothing and clothing - accessory retailers in the US (seasonally adjusted) was $58.056 billion, a year - on - year increase of 0.98% and a month - on - month decrease of 0.49%. The inventory - to - sales ratio of US clothing and clothing - accessory retailers in May 2025 (seasonally adjusted) was 2.22, a year - on - year decrease of 0.06 and a month - on - month decrease of 0.02 [48]. 3.5 Industrial Chain Operation - In the cotton - yarn market, downstream procurement increased, and the overall performance improved slightly but was still mediocre. In terms of price, spinners' quotes increased slightly, and downstream gradually digested them, but the acceptance of high prices was poor. In terms of profit, there was little change. Currently, the cash - flow loss of inland spinners for C32S was about 500 yuan/ton, while Xinjiang spinners still had a small profit. In terms of inventory and operation, the transaction in the pure - cotton yarn market continued, and spinners continued to reduce inventory slightly. There was little change in the operation rate this week, and inland spinners continued to limit production. In the all - cotton grey - cloth market, the demand improved slightly, and the order volume of all - cotton weavers increased slightly, mainly small and scattered orders, and the recovery speed was lower than expected. This week, the operation rate of all - cotton grey - cloth increased slightly, the sales volume increased slightly, and weavers reported maintaining production - sales balance, with the current inventory decreasing slightly. It was reported that the order volume in the Nantong home - textile market was insufficient, the competition among weavers was fierce, and the operation - rate recovery was insufficient. The knitting orders in the Foshan area continued, but the operation - rate recovery was limited. The order - receiving situation of weavers in the northern region was average. Weavers generally had little confidence in September, and the marginal improvement in raw - material procurement enthusiasm was limited, generally maintaining just - in - time purchasing [51]. 4. Logic and Outlook - Cotton is expected to fluctuate strongly in the short term, and enterprises can hedge for new cotton. The basis is expected to remain strong. Cotton yarn mainly follows cotton prices but faces greater pressure later due to intense competition in the industrial chain and declining exports [61].

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].

Report Industry Investment Rating No relevant content provided. Core Viewpoints of the Report - The overall assessment of cotton investment is complex. The fundamentals are neutral, with different data sources showing varying production, consumption, and inventory figures. The basis is bullish, the inventory is bearish, the market trend is bullish, the main position is bullish, and there are differences in the market's expectations for the peak season of "Golden September and Silver October." If the Zhengzhou cotton main contract 01 can stand above 14,000, the probability of subsequent volatile upward movement increases; otherwise, if it falls below 14,000, the downward space will open [4]. - There are both bullish and bearish factors in the market. Bullish factors include the reduction of previous mutual tariffs between China and the US, a year - on - year decrease in commercial inventory, and an enhanced expectation for the peak consumption season of "Golden September and Silver October." Bearish factors include the postponement of trade negotiations, currently high export tariffs to the US, a decline in overall foreign trade orders, an increase in inventory, and the upcoming large - scale listing of new cotton [5]. Summary by Directory 1. Previous Day's Review No relevant content provided. 2. Daily Tips - **Fundamentals**: According to ICAC's August report, the production in the 2025/26 season is 25.9 million tons, and consumption is 25.6 million tons. According to USDA's August report, the production in the 2025/26 season is 25.392 million tons, consumption is 25.688 million tons, and the ending inventory is 16.093 million tons. In July, textile and clothing exports were $26.77 billion, a year - on - year decrease of 0.1%. In July, China imported 50,000 tons of cotton, a year - on - year decrease of 73.2%, and imported 110,000 tons of cotton yarn, a year - on - year increase of 15.38%. According to the Ministry of Agriculture's August forecast for the 2025/26 season, production is 6.25 million tons, imports are 1.4 million tons, consumption is 7.4 million tons, and the ending inventory is 8.23 million tons [4]. - **Basis**: The national average price of spot 3128b is 15,334 yuan, and the basis is 1,234 yuan (for the 01 contract), with a premium over futures [4]. - **Inventory**: The Ministry of Agriculture of China estimates the ending inventory in the 2025/26 season to be 8.23 million tons in August [4]. - **Market Trend**: The 20 - day moving average is flat, and the K - line is above the 20 - day moving average [4]. - **Main Position**: The position is bullish, the net long position increases, and the main trend is unclear [4]. - **Expectations**: The main contract 01 of Zhengzhou cotton retraced to the 14,000 mark again during the night session. There are differences between the long and short sides regarding the expectation of the peak season of "Golden September and Silver October" [4]. 3. Today's Focus No relevant content provided. 4. Fundamental Data - **USDA Global Cotton Supply - Demand Forecast**: In August, the total global production was 25.392 million tons, a month - on - month decrease of 391,000 tons and a year - on - year decrease of 2%. Total global consumption was 25.688 million tons, a month - on - month decrease of 30,000 tons and a year - on - year increase of 0.4%. Total global imports were 9.489 million tons, a month - on - month decrease of 239,000 tons and a year - on - year increase of 2%. Total global exports were 9.49 million tons, a month - on - month decrease of 240,000 tons and a year - on - year increase of 3%. The total global ending inventory was 16.093 million tons, a month - on - month decrease of 747,000 tons and a year - on - year decrease of 2.4% [9][10]. - **ICAC Global Cotton Supply - Demand Balance Sheet**: In the 2025/26 season, global production is 25.9 million tons, an increase of 400,000 tons (+1.6%) year - on - year; global consumption is 25.6 million tons, basically flat year - on - year; the ending inventory is 17.1 million tons, an increase of 260,000 tons (+1.6%) year - on - year; the global trade volume is 9.7 million tons, an increase of 360,000 tons (+3.9%) year - on - year; the price forecast (Cotlook A index) is 57 - 94 cents per pound (median 73 cents) [11]. - **Ministry of Agriculture's Forecast for China**: In the 2025/26 season, the initial inventory is 8.01 million tons, the sown area is 2.878 million hectares, the harvested area is 2.878 million hectares, the yield per hectare is 2,172 kg, the production is 6.25 million tons, imports are 1.4 million tons, consumption is 7.4 million tons, and the ending inventory is 8.23 million tons. The average domestic cotton 3128B price is expected to be 15,000 - 17,000 yuan per ton, and the Cotlook A index is expected to be 75 - 100 cents per pound [13]. 5. Position Data No relevant content provided.

Industry Investment Rating - No investment rating for the industry is provided in the report. Core Viewpoints - The Zhengzhou cotton main contract 01 shows signs of stabilizing and starting to rise after a short - term battle around 14,000. Optimistic expectations may prevail regarding whether the "Golden September and Silver October" peak season will be prosperous. If it can stabilize above 14,000, the probability of subsequent volatile upward movement increases [4]. Summary by Directory 1. Previous Day's Review - No content related to the previous day's review is provided in the report. 2. Daily Hints - **Fundamentals**: According to the ICAC August report, the 2025/26 cotton production is 25.9 million tons and consumption is 25.6 million tons. The USDA August report shows that the 2025/26 production is 25.392 million tons, consumption is 25.688 million tons, and the ending inventory is 16.093 million tons. In July, textile and clothing exports were $26.77 billion, a year - on - year decrease of 0.1%. China's cotton imports in July were 50,000 tons, a year - on - year decrease of 73.2%; cotton yarn imports were 110,000 tons, a year - on - year increase of 15.38%. The Ministry of Agriculture's August forecast for the 2025/26 season is a production of 6.25 million tons, imports of 1.4 million tons, consumption of 7.4 million tons, and an ending inventory of 8.23 million tons, presenting a neutral situation [4]. - **Basis**: The national average price of spot 3128b is 15,235 yuan, with a basis of 1,115 yuan (for the 01 contract), indicating a premium over futures, which is bullish [4]. - **Inventory**: The Ministry of Agriculture's forecast for China's ending inventory in the 2025/26 season in August is 8.23 million tons, which is bearish [4]. - **Market**: The 20 - day moving average is flat, and the K - line is above the 20 - day moving average, which is bullish [4]. - **Main Position**: The position is bullish, but the net long position is decreasing, and the main trend is unclear; still bullish [4]. 3. Today's Focus - No content related to today's focus is provided in the report. 4. Fundamental Data - **USDA Global Cotton Supply - Demand Forecast**: Data on production, consumption, imports, exports, and ending inventory of major cotton - producing and consuming countries from 2021/22 to 2024/25 (July and August statistics) are presented, along with monthly adjustments, year - on - year percentages, and year - on - year changes [9][10]. - **ICAC Global Cotton Supply - Demand Balance Sheet**: In the 2025/26 season, global production is 2.59 million tons (+400,000 tons, +1.6%), consumption is 2.56 million tons (basically flat), ending inventory is 1.71 million tons (+260,000 tons, +1.6%), global trade volume is 970,000 tons (+360,000 tons, +3.9%), and the price forecast (Cotlook A index) is 57 - 94 cents per pound (median 73 cents) [11]. - **Ministry of Agriculture's China Cotton Forecast**: For the 2025/26 season, the estimated beginning inventory is 8.01 million tons, production is 6.25 million tons, imports are 1.4 million tons, consumption is 7.4 million tons, and ending inventory is 8.23 million tons. The domestic average price of cotton 3128B is expected to be in the range of 15,000 - 17,000 yuan per ton, and the Cotlook A index is expected to be in the range of 75 - 100 cents per pound [13]. 5. Position Data - No content related to position data is provided in the report.

Report Industry Investment Rating - Not provided in the content Core Viewpoint - Cotton is in a stage of oscillating downward, and the price center is expected to decline in the later stage. The overall market remains under pressure, and it is recommended to go short after rebounds [7]. Summary by Directory Domestic Supply and Demand Situation - **Supply and Demand Balance**: Since the 2021/22 season, due to the impact of the macro - economy and the pandemic, cotton consumption has been frustrated, while production has remained at a relatively high level. The domestic cotton market has shifted from destocking to inventory accumulation, and the price center has moved down. In the 2024/25 season, production was at a high level, imports decreased, and demand was relatively stable, with sufficient supply. In the 2025/26 season, production is expected to be optimistic, but demand still faces pressure, and the supply - demand situation is expected to remain loose [13]. - **New Cotton Growth**: In 2024, the cotton planting area decreased slightly, but the yield per unit was good, and the output reached a high in recent years. In 2025, the intended planting area increased, the weather in the producing areas was generally good, and there was a strong expectation of a bumper harvest. Currently, the new cotton is growing well, but attention should be paid to the weather in the producing areas [19]. - **Inventory Situation**: The 2023/24 season had sufficient cotton supply and a high carry - over inventory. At present, it is in the destocking period, with significant destocking of commercial inventory. However, industrial inventory has remained at a high level, and the overall industrial and commercial inventory is still relatively high. As of the end of July, the commercial inventory was 218.98 million tons, a decrease of 64 million tons from the previous month; the industrial inventory was 89.84 million tons, a decrease of 0.46 million tons from the previous month [23][24]. - **Import Situation**: The issue of Xinjiang cotton has affected the domestic cotton - using pattern. In 2024, the issuance of sliding - scale duty quotas was less than expected, and cotton imports showed a downward trend. In June 2025, China's cotton imports were 30,000 tons, a decrease of 25.0% from the previous month and 82.1% from the same period last year. From January to June 2025, the cumulative cotton imports were 460,000 tons, a year - on - year decrease of 74.3% [34][43]. Downstream Demand - **Demand Status**: Overseas interest - rate cuts are still uncertain, and the US tariff policy is also uncertain. The domestic policy is boosting the economy, but the demand recovery still needs to be tracked. Although downstream orders for gauze have improved recently, overall orders are still insufficient, the operating load is low, and the finished product inventory is high [47]. - **Retail and Export Data**: In July 2025, the retail sales of clothing, footwear, and knitted textiles were 9.61 billion yuan, a year - on - year increase of 1.8% and a month - on - month decrease of 24.63%. From January to July, the cumulative retail sales were 83.11 billion yuan, a year - on - year increase of 2.9%. In July 2025, China's textile and clothing exports were 2.6766 billion US dollars, a year - on - year decrease of 0.06% and a month - on - month decrease of 2.01%. From January to July, China's textile and clothing exports were 17.041 billion US dollars, a year - on - year increase of 0.63% [50]. Global Supply and Demand Situation - **Global Balance**: In the 2024/26 season, global cotton production is expected to increase, consumption will also recover significantly, and the inventory - to - consumption ratio will rise slightly. In the 2025/26 season, global cotton production is expected to decline, demand will be stable, and the ending inventory will decrease [71]. - **US Situation**: In the 2024/25 season, the planting area of US cotton increased, the harvest area increased significantly, but the yield per unit decreased due to drought, and the output increased. In the 2025/26 season, the planting area decreased, the yield per unit is expected to decline, and the output is expected to recover. US textile and clothing demand has recovered to some extent, but subsequent demand still needs to be tracked. Last week, US cotton export sales rebounded [72][73]. Spread and Basis - **Spread**: The report shows the 1 - 5, 5 - 9, and 9 - 1 spreads of cotton, and the data changes over time [100]. - **Basis**: The report presents the basis of cotton contracts 01, 05, and 09, and the data changes over time [102].

Report Summary 1. Report Industry Investment Rating No information provided in the report. 2. Core Viewpoints - The fundamentals of cotton present a neutral outlook. The 25/26 annual production and consumption data from different institutions show a relatively balanced supply - demand situation. The market is expected to enter the "Golden September and Silver October" consumption peak season, and if the Zhengzhou Cotton 01 contract can hold above the 14,000 mark, there will be further upward momentum. In the short term, it will fluctuate in the range of 14,050 - 14,250 [4]. - There are both positive and negative factors in the market. Positive factors include the reduction of previous mutual tariffs between China and the US and a year - on - year decrease in commercial inventory. Negative factors are the postponement of trade negotiations, high current export tariffs to the US, the off - season of consumption, a decline in overall foreign trade orders, an increase in inventory, and the upcoming large - scale listing of new cotton [5]. 3. Summary by Directory 3.1 Previous Day's Review No information provided in the report. 3.2 Daily Tips - **Fundamentals**: Different institutions' reports on the 25/26 annual cotton production and consumption data vary. For example, the ICAC 8 - month report shows a production of 25.9 million tons and consumption of 25.6 million tons; the USDA 8 - month report shows a production of 25.392 million tons, consumption of 25.688 million tons, and an ending inventory of 16.093 million tons. Customs data shows that in July, textile and clothing exports were $26.77 billion, a year - on - year decrease of 0.1%. China's cotton imports in July were 50,000 tons, a year - on - year decrease of 73.2%, and cotton yarn imports were 110,000 tons, a year - on - year increase of 15.38%. The Ministry of Agriculture's 25/26 annual data shows a production of 6.25 million tons, imports of 1.4 million tons, consumption of 7.4 million tons, and an ending inventory of 8.23 million tons [4]. - **Basis**: The national average price of spot 3128b is 15,234, and the basis for the 01 contract is 1109, indicating a premium over futures, which is a bullish signal [4]. - **Inventory**: The Ministry of Agriculture's forecast of the ending inventory in July for the 25/26 annual is 8.23 million tons, which is a bearish factor [4]. - **Market Trend**: The 20 - day moving average is upward, and the K - line is above the 20 - day moving average, showing a bullish trend [4]. - **Main Position**: The position is bullish, but the net long position has decreased. The main trend is bullish [4]. - **Expectation**: With the approaching of the "Golden September and Silver October" consumption peak season, the market sentiment is optimistic. If the Zhengzhou Cotton 01 contract can stabilize above the 14,000 mark, there will be further upward momentum. In the short term, it will fluctuate in the range of 14,050 - 14,250 [4]. 3.3 Today's Focus No information provided in the report. 3.4 Fundamental Data - **USDA Global Cotton Supply - Demand Forecast**: The report provides the production, consumption, import, export, and ending inventory data of major cotton - producing and consuming countries from 2021/22 to 2024/25 (July and August data), as well as the monthly adjustments and year - on - year changes [10][11]. - **ICAC Global Cotton Supply - Demand Balance Sheet**: In the 2025/26 annual, the global production is 2.59 million tons, an increase of 400,000 tons (+1.6%); consumption is basically flat at 2.56 million tons; the ending inventory is 1.71 million tons, an increase of 260,000 tons (+1.6%); the global trade volume is 970,000 tons, an increase of 360,000 tons (+3.9%); the price forecast (Cotlook A index) is 57 - 94 cents per pound (median 73 cents) [12]. - **Ministry of Agriculture's Data**: From 2023/24 to 2025/26 (July forecast), data such as the beginning inventory, sowing area, harvest area, yield per unit area, production, import, consumption, ending inventory, domestic cotton 3128B average price, and Cotlook A index are provided [14]. 3.5 Position Data No information provided in the report.