Group 1: Market Information - Futures contracts' closing prices, price changes, trading volumes, and open - interest data for CF and CY contracts are presented, including CF01, CF05, CF09, CY01, CY05, and CY09 [2] - Spot prices of various cotton and yarn products are provided, such as CCIndex3128B, Cot A, and CY IndexC32S, along with their price changes [2] - Price spreads are given, including cotton and yarn inter - month spreads and cross - variety spreads, as well as domestic - foreign spreads [2] Group 2: Market News and Views Cotton Market - As of December 18, 2025, the cumulative inspection volume of U.S. upland cotton + Pima cotton was 2.4244 million tons, accounting for 78% of the estimated annual U.S. cotton production, 9% slower than the same period last year [4] - The ON - CALL data shows that as of December 12, 2025, the number of un - priced contracts of sellers on the ON - CALL 2603 contract decreased by 1,039 to 21,369, a decrease of 20,000 tons compared to last week [4] - In November 2025, the export volume of all - cotton grey fabrics was 48.58 million meters, a year - on - year increase of 22%, and the export value was $46.23 million, a year - on - year increase of 3.5% [5] - The new cotton in the 25/26 season is in good harvest, but the sales progress is fast, and ginneries have little pressure to sell. There are rumors that the cotton planting area in Xinjiang may decrease next year, and Xinjiang textile mills are expected to expand production capacity, all of which are positive for cotton prices [6] - Sino - U.S. relations are easing, and the mutual reduction of tariffs is beneficial for China's textile and clothing exports [6] - The cotton fundamentals are strong, and the price is expected to rise further. It is recommended to build long positions on dips [6] Trading Strategies - The U.S. cotton is expected to fluctuate in a range, while Zhengzhou cotton is expected to be bullish in the short - term [7] - For arbitrage and options trading, it is recommended to wait and see [8][9] Yarn Industry - The overall atmosphere in the pure - cotton yarn market is weak, except for high - count yarns. Some traders are optimistic about future consumption and buy on dips [9] - The pure - cotton grey fabric market remains differentiated. Weaving mills' orders have declined, and they mainly have small orders with tight delivery times. Profits are in the red, and they are not confident about the post - Chinese New Year market [9] Group 3: Options - Options contract data including closing prices, price change rates, implied volatility, and other parameters are presented for CF601C13400.CZC, CF601P13000.CZC, and CF601P12400.CZC [11] - The 10 - day HV of cotton increased slightly yesterday. The implied volatility of CF601 - C - 13400 is 6.7%, CF601 - P - 13000 is 11.4%, and CF601 - P - 12400 is 17.8% [11] - The PCR of the main contract of Zhengzhou cotton is 0.7339, and the volume PCR is 0.6421. The trading volumes of both call and put options have decreased today [12] - It is recommended to wait and see in options trading [13] Group 4: Relevant Attachments - Figures show various price spreads and basis data, including 1% tariff domestic - foreign cotton price spread, 1 - month, 5 - month, and 9 - month cotton basis, CY05 - CF05 and CY01 - CF01 spreads, and CF9 - 1 and CF5 - 9 spreads [15][18][22][23]

1. Report Industry Investment Rating No information provided. 2. Core Viewpoints of the Report - The cotton market has strong fundamentals with multiple positive factors supporting it. There is a high probability that US cotton will move in a range-bound manner, while Zhengzhou cotton is expected to show a moderately bullish trend. It is recommended to build long positions on dips [6][7]. - The cotton yarn industry has a weak downstream demand. The cotton yarn market has a light trading volume, and the weaving mills have high inventory levels. Attention should be paid to the trend of Zhengzhou cotton and downstream restocking [9]. 3. Summary by Directory 3.1 Market Information - **Futures Market**: Most cotton and cotton yarn futures contracts closed lower. For example, the CF01 contract closed at 13,940, down 60; the CY01 contract closed at 19,855, down 40 [2]. - **Spot Market**: The CCIndex3128B price was 15,130 yuan/ton, up 68; the CY IndexC32S price was 20,830, unchanged [2]. - **Spreads**: In cotton, the 1 - 5 - month spread was -5, down 15; in cotton yarn, the 1 - 5 - month spread was -185, down 20 [2]. 3.2 Market News and Views - **Cotton Market News** - In November 2025, China's imported cotton yarn volume was about 150,000 tons, a month - on - month increase of about 10,000 tons and a year - on - year increase of about 30,000 tons. From January to November 2025, the total imported cotton yarn volume was 1.33 million tons, a year - on - year decrease of about 40,000 tons [4]. - In November 2025, China imported 120,000 tons of cotton, a year - on - year increase of 11,800 tons and a month - on - month increase of 31,000 tons. From January to November 2025, the cumulative imported cotton volume was 890,000 tons, a year - on - year decrease of 64% [4]. - The average temperature in the US cotton - growing areas was 49.79°F, 3.21°F higher than the same period last year; the average rainfall was 0.05 inches, 0.28 inches lower than the same period last year. The temperature in Texas increased and precipitation decreased, and the La Nina climate in the Northern Hemisphere winter may lead to drought during the sowing season [5]. - **Trading Logic**: Positive factors in the market support a strong cotton fundamentals. Technically, cotton has increased in positions and broken through the previous platform, with potential for further upward movement [6]. - **Trading Strategies** - **Single - side**: US cotton is likely to move in a range - bound manner, while Zhengzhou cotton is expected to trend moderately bullish [7]. - **Arbitrage**: Hold a wait - and - see attitude [8]. - **Options**: Hold a wait - and - see attitude [9]. - **Cotton Yarn Industry News** - Zhengzhou cotton is moderately bullish. The trading volume in the pure - cotton yarn market is light, mainly for rigid demand. Weaving mills have high inventory levels, but there is still restocking demand in some areas. The price of pure - cotton yarn was stable to slightly weak last week, and spinning mills with high inventory levels promoted sales by reducing prices [9]. - The trading volume in the all - cotton greige fabric market is light, with only small orders in some areas. Weaving mills have high inventory levels and limited destocking effects [9]. 3.3 Options - **Volatility**: The 10 - day HV of cotton yesterday was 6.4492, with a slight increase in volatility. The implied volatility of CF601 - C - 13400 was 6.7%, that of CF601 - P - 13000 was 11.4%, and that of CF601 - P - 12400 was 17.8% [11]. - **Options Strategy**: Hold a wait - and - see attitude [13]. 3.4 Related Attachments - The report provides multiple charts, including those showing the 1% tariff - based domestic and foreign cotton price spreads, cotton basis for different months, and spreads between cotton and cotton yarn contracts [15][18][22][23].