1. Report Industry Investment Rating - No relevant information provided 2. Core Viewpoints - The USDA report in March 2026 increased the global cotton output in the 2025/26 season by 250,000 tons to 26.34 million tons, while reducing global cotton consumption by 30,000 tons to 25.82 million tons, and the global ending stocks increased by 280,000 tons. The report is generally bearish, but the market focus has shifted to the 2026/27 season, so the impact on the market is limited. The external market is oscillating strongly. In the domestic market, the price difference between domestic and foreign cotton remains high, and the upward space is still restricted by the import cotton price. The downstream peak - season demand shows signs of starting, and the fundamentals change little. The market should pay attention to the previous high pressure. The domestic cotton price is expected to show a high - level oscillation trend later [8] - The "Golden March and Silver April" traditional textile peak season has arrived, and the adjustment of the US tariff policy is beneficial to textile exports. The replenishment demand of textile enterprises after the Spring Festival has increased, and the sales of lint cotton are smooth. The Xinjiang Uygur Autonomous Region government plans to keep the total cotton output stable at around 5.6 million tons in 2026 (a 9.2% decrease from 6.165 million tons in 2025), and the market expects the new - season cotton supply to tighten [9] 3. Summary by Directory 3.1 Market Review and Operation Suggestions - Zhengzhou cotton is oscillating strongly. The latest price index of 328 - grade cotton is 16,848 yuan/ton, up 180 yuan/ton from the previous trading day. The domestic cotton yarn market is improving, the downstream shipments are increasing, and the market trading atmosphere is warming up. The all - cotton grey fabric market is generally stable, with the walking speed slower than before and the price remaining stable. The demand for high - count and high - density grey fabrics is still good, and weaving factories are producing according to orders [7] - The USDA report in March 2026 increased the global cotton output in the 2025/26 season by 250,000 tons to 26.34 million tons, including an increase of 160,000 tons in Brazilian cotton to 4.25 million tons and an increase of 110,000 tons in Chinese cotton to 7.73 million tons. It decreased global cotton consumption by 30,000 tons to 25.82 million tons, with an increase of 110,000 tons in Chinese cotton consumption to 8.6 million tons and decreases of 40,000 tons, 20,000 tons, and 20,000 tons in Pakistan, Bangladesh, and Vietnam respectively. The global ending stocks increased by 280,000 tons. The external market is oscillating strongly. The price difference between domestic and foreign cotton remains high, the downstream peak - season demand shows signs of starting, and the market should pay attention to the previous high pressure [8] 3.2 Industry News - According to the monthly supply - demand report of agricultural products released by the Ministry of Agriculture and Rural Affairs, this month's prediction of China's cotton supply - demand situation is consistent with last month, and the average cotton price is slightly increased. The "Golden March and Silver April" traditional textile peak season has arrived, and the adjustment of the US tariff policy is beneficial to textile exports. The replenishment demand of textile enterprises after the Spring Festival has increased, and the sales of lint cotton are smooth. The Xinjiang Uygur Autonomous Region government plans to keep the total cotton output stable at around 5.6 million tons in 2026 (a 9.2% decrease from 6.165 million tons in 2025), and the market expects the new - season cotton supply to tighten, with the domestic cotton price expected to show a high - level oscillation trend later [9] 3.3 Data Overview - The report provides multiple data charts, including the China Cotton Price Index, cotton spot price, cotton futures price, cotton basis change, CF spreads, cotton commercial inventory, cotton industrial inventory, warehouse receipt volume, and exchange rates such as the US dollar against the Chinese yuan and the US dollar against the Indian rupee, with data sources from Wind and the Research and Development Department of CCB Futures [17][18][29]

1. Report Industry Investment Rating - Not provided in the content. 2. Core Viewpoints of the Report - With the deepening of drought in the US cotton - growing areas, the expected decline in Brazil's cotton production, and the contraction of China's cotton - planting intention, the supply of global cotton in the 2026/27 season is expected to tighten. The US cotton signing and sales are currently in the peak period, with a high possibility of achieving the export target. The net position of CFTC funds has rebounded from the bottom. Combined with the expectation of Trump's visit to China, there is an upward space for US cotton. After the Spring Festival, Zhengzhou cotton has broken through the previous high but is still restricted by the price difference between domestic and foreign cotton. In the short term, it may enter a volatile adjustment trend again, but in the medium and long term, the price is expected to be positive supported by the contraction of planting area, good monthly apparent consumption, and the year - on - year decline in commercial inventory levels. It is necessary to pay attention to changes in cotton - planting intention and the policy guidance of the Xinjiang cotton target price from 2026 - 2028. The strategy is to buy on dips and purchase call options. The important variables are macro - policies, industrial policies, and cotton - planting intention [7][48]. 3. Summary According to the Table of Contents 3.1 Market Review - In February, the main contract of US cotton rebounded from a low level, rising 1.7% monthly. The external market trend in February was mainly boosted by the USDA Agricultural Outlook Forum report, which estimated that global cotton production would decline and consumption would increase in the 2026/27 season, with the global ending inventory decreasing by 5.2% year - on - year, and the US cotton inventory decreasing by 4.5% year - on - year but remaining above 4 million bales. Recently, the signing progress of US cotton sales has been good, and the current grain - to - cotton ratio is slightly lower than the same period last year. Attention should be paid to the intention area report. In the same month, Zhengzhou cotton broke through the pre - festival trading range, with a monthly increase of 4.6%. The strengthening of the external market during the festival narrowed the price difference between domestic and foreign cotton, and the resistance level of Zhengzhou cotton continued to move up. At the same time, the tariff level may decline after the Trump administration replaces IEEPA with Article 122, and the demand is expected to be good as it is about to enter the traditional consumption peak season after the festival [9][11]. 3.2 Global Cotton Supply and Demand Situation - The US Agricultural Outlook Forum report predicts that in the 2026/27 season, global cotton production will decrease by 3.2% year - on - year to 116 million bales, consumption will reach 120 million bales, an increase of 1.2% year - on - year, and the global ending inventory of cotton is expected to be 71.2 million bales, a decrease of 5.2% year - on - year. Among them, US cotton production in the 2026/27 season is expected to decline by 2.3% year - on - year to 13.6 million bales, exports will increase by 1.7% year - on - year to 12.2 million bales, and the US cotton ending inventory is expected to decline by 4.5% year - on - year to 4.2 million bales, remaining at a moderately high inventory level after the decline. Due to the decline in both planting area and yield per unit, China's cotton production in the 2025/26 season is expected to decline by 8.6 to 32 million bales year - on - year, consumption is expected to increase by 0.8% year - on - year to 39.3 million bales, and China's cotton ending inventory is expected to decline by 1.0% year - on - year to 36 million bales [13]. 3.3 Domestic Supply and Demand Situation 3.3.1 National Cotton Farmers' Cotton - Planting Intention - In January 2026, the Cotton Farmers' Branch of the China Cotton Association conducted a second survey on the cotton - planting intention of 1,805 fixed - point farmers in 10 provinces and municipalities and the Xinjiang Uygur Autonomous Region. The results showed that the national cotton - planting intention area in 2026 was 44.583 million mu, a year - on - year decrease of 0.5%, with the decline narrowing by 0.5 percentage points compared with the previous period; among them, the area in Xinjiang was 40.831 million mu, a year - on - year decrease of 0.2%, with the decline narrowing by 0.7 percentage points compared with the previous period. The cotton - planting income in Xinjiang is relatively stable. The No. 1 Central Document in 2026 clearly states that the cotton target price policy will continue to be improved. Since January, cotton prices have mainly risen, and more than 90% of farmers still choose to grow cotton. However, due to the unclear implementation details of the new round of price levels and cotton - planting area adjustments, the enthusiasm of a small number of cotton farmers has declined compared with the previous year, and the intention area has slightly decreased. In the mainland, due to the low purchase price, the decrease in the area of inter - cropping crops with cotton, and the high cost of cotton - planting, the proportion of farmers choosing to reduce the area has increased, but those who remain unchanged and those who are hesitant still account for the majority. Among the surveyed cotton farmers in the country, the proportion of those with unchanged intention is the highest, at 69.6%, those who are hesitant account for 21.8%, and those who plan to reduce and increase the area account for 5.8% and 2.8% respectively [15]. 3.3.2 Cotton Purchase and Processing Situation - As of March 1, 2026, a total of 1,099 cotton processing enterprises in the 2025 cotton season processed cotton and carried out notarized inspections in accordance with the requirements of the cotton quality inspection system reform plan. The national cumulative inspection was 33,138,040 bales, a total of 7.4803 million tons, which was the same as the previous day and a year - on - year increase of 13.3%. Among them, the inspection volume in Xinjiang was 32,687,807 bales, a total of 7.3795 million tons, the same as the previous day; the inspection volume in the mainland was 279,698 bales, a total of 62,200 tons [17]. 3.3.3 Inventory Situation - Statistical data shows that the commercial inventory of cotton in mid - February was 5.5037 million tons, a decrease of 285,000 tons compared with the end of last month; the industrial inventory of cotton in mid - February was 1.0292 million tons, an increase of 28,200 tons compared with the end of last month. From the perspective of the graph trend, the current commercial inventory of cotton has reached the annual peak and is turning to a consumption trend. The cotton consumption this year is better than the same period last year, and the current ending inventory has changed from slightly higher year - on - year to slightly lower year - on - year. The industrial inventory level of cotton is rising steadily, with downstream enterprises replenishing stocks before the festival, and the expansion of production capacity supports the demand for raw materials. In February, the yarn inventory index was 22.95 days, a decrease of 2.87 days compared with the previous month; the grey fabric inventory index in February was 32.58 days, the same as the previous month [18]. 3.3.4 Cotton Import Volume - In December 2025, the import volume was 177,300 tons, an increase of 41,500 tons year - on - year (135,900 tons) and an increase of 58,600 tons month - on - month (118,700 tons); from January to December 2025, the cumulative import volume was 1.0659 million tons, a year - on - year decrease of 59.2%, a decrease of 1.5443 million tons year - on - year (2.6102 million tons); in the 2025/26 season, the cumulative import volume was 480,100 tons, a year - on - year increase of 2.8%, an increase of 12,900 tons year - on - year (467,200 tons) [20]. 3.3.5 Textile Enterprises' Processing Situation - According to the statistics of the Cotton Textile Information Network, as of February 27, the cotton inventory of textile enterprises was 34.8 days, a decrease of 0.2 days compared with last week; the cotton yarn inventory of textile enterprises was 23.9 days, an increase of 0.4 days compared with last week; the cotton yarn inventory of weaving factories was 10.2 days, an increase of 0.4 days compared with last week; the cotton grey fabric inventory was 36.5 days, the same as last week. As of February 27, the yarn load index in China was 43.3%, an increase of 27.1% compared with last week; the grey fabric load index in China was 41.6%, an increase of 27.7% compared with last week. In February, pure cotton yarn enterprises resumed work after the Spring Festival, mainly maintaining stockpiling and previous orders. The trading center shifted up by 200 - 500, and the trading of high - count yarn was good, with the actual cash flow performing well. The pure cotton grey fabric market mainly focused on resuming work, and it is expected that the market trading will increase after the Lantern Festival, and the quotation has been slightly increased [22]. 3.3.6 Textile Demand Situation - In December 2025, the retail sales of clothing, footwear, needles, and textiles were 166.1 billion yuan, a year - on - year increase of 0.6%. From January to December 2025, the cumulative retail sales of clothing, footwear, needles, and textiles were 1.5215 trillion yuan, a year - on - year increase of 3.2%. Among them, the retail sales of clothing from January to December were 1.1045 trillion yuan, a year - on - year increase of 2.8%. In December 2025, the export value of textile and clothing was 26 billion US dollars, a year - on - year decrease of 7.4%. From January to December 2025, the cumulative export value of textile and clothing was 293.8 billion US dollars, a year - on - year decrease of 2.4%. From the perspective of the textile and clothing import data of the United States, the European Union, and Japan, in December 2025, the cumulative import volume of textile and clothing in the European Union was 1.02 million tons, a year - on - year increase of 16.0%; in December 2025, the import volume of textile and clothing in the United States was 6.9 billion square meters, a year - on - year decrease of 24.7%; in December 2025, the import volume of textile and clothing in Japan was 210,000 tons, a year - on - year increase of 3.4%. Overall, the year - on - year growth rate of domestic consumption in December narrowed, but domestic consumption still had support; the external demand consumption in the fourth quarter was differentiated. The monthly import of the European market increased year - on - year, performing better than last year, the US market had a continuous year - on - year decline for four months with an enlarged decline, and the demand in the Japanese market was not significantly affected [35]. 3.4 Summary and Future Outlook - The content is the same as the core viewpoints of the report, including the macro situation, supply and demand situation, views, strategies, and important variables [7][48].

Report Industry Investment Rating - Not provided in the content Core Viewpoints - The USDA supply and demand report is bullish as it lowers both global and US cotton production and inventory, but short - term global cotton prices are constrained by a stronger US dollar and Trump's tariff risks [18] - Domestically, cotton production has increased, but inventory accumulation is lower than expected. The market anticipates a decline in planting area in the new season, leading to a tight long - term supply [18] - Currently, the domestic - foreign cotton price spread is high, and the domestic market is over - valued compared to the international market. Short - term cotton prices are expected to fluctuate weakly, while in the long - term, they are expected to strengthen due to strong demand and the expectation of reduced planting area [18] Summary of Key Points by Section Global Cotton Supply and Demand Situation - The USDA's January supply and demand report shows a global 2025/26 cotton production estimate of 119.43 million bales, down from the December estimate of 119.79 million bales [2] - The global 2025/26 cotton ending inventory estimate is 74.48 million bales, down from the December estimate of 75.97 million bales, making the supply - demand report bullish [2] US Cotton Supply and Demand Situation - The 2025/26 US cotton production estimate is 13.92 million bales, a month - on - month decrease of 350,000 bales from the December estimate [3] - The 2025/26 US cotton ending inventory estimate is 4.2 million bales, a month - on - month decrease of 300,000 bales (a 7% decline) from December, with an inventory - to - consumption ratio of 30.4% [3] Domestic Cotton Industry Chain Situation Domestic Cotton Planting Area - The 2025/26 national cotton production estimate is 7.73 million tons, unchanged from the previous month and an increase of 880,000 tons (a 12.84% increase) compared to the 2024/25 season [5] - The average seed cotton purchase price this year is around 6.2 - 6.3 yuan/kg, corresponding to a cotton cost of about 14,600 yuan/ton [9] Cotton Inventory Situation - As of the end of January, the commercial cotton inventory is 5.79 million tons, at a historical high for the same period, with a year - on - year increase of 10,000 tons, but the inventory accumulation rate is lower than expected [11] - As of the end of January, the industrial cotton inventory of textile enterprises is 1 million tons, a year - on - year increase of 20,000 tons, and the industrial inventory is at a neutral level. With low downstream profits, textile mills have little motivation to actively replenish inventory [13] Cotton Domestic - Foreign Price Spread - As of February 10, 2026, the domestic - foreign cotton price spread (the difference between the domestic spot B index and the landed cost of imported cotton under 1% tariff) is about 3,600 yuan/ton, with the domestic price significantly higher than the international price and at a ten - year high [14]

Report Industry Investment Rating - The rating for cotton is "Bullish" [1] Core Viewpoints of the Report - The supply-demand outlook for the cotton market is tightening, and the cotton market is expected to fluctuate upward. In 2026, the ICE cotton price is expected to be volatile and bullish, with an estimated operating range of 60 - 80 cents per pound. The Zhengzhou cotton market is also generally optimistic, with an estimated range of 13,300 - 16,500 yuan per ton [1][2][165][167] Summary According to the Directory 1. 2025: Trade War and Strong Demand Caused Volatility in Zhengzhou Cotton, with a Strong Domestic and Weak Overseas Performance - In 2025, Zhengzhou cotton showed a wide - range volatile trend. The trade war intensified the fluctuations, but strong domestic demand provided support. The main contract price of Zhengzhou cotton operated between 12,300 - 14,300 yuan per ton, while the overseas market was generally weak, operating between 60 - 70 cents per pound [14] - From January to March, Zhengzhou cotton was relatively resistant to decline compared to the overseas market, and the internal - external price difference widened. The overseas market was weak due to the expected supply - demand loosening and trade war concerns [14] - From April to May, trade policy changes led to increased volatility in both domestic and overseas markets. Zhengzhou cotton first fell and then rose, and the internal - external price difference first narrowed and then expanded [15] - From June to August, rapid domestic commercial inventory depletion and a strong commodity atmosphere drove up Zhengzhou cotton, while the overseas market was weak [15] - In September, the expectation of increased Xinjiang cotton production led to a decline in Zhengzhou cotton, and the internal - external price difference narrowed [16] - From October to December, Zhengzhou cotton continued to rise, and the internal - external price difference widened further. The overseas market was under pressure due to weak export demand and seasonal supply pressure [16] 2. International Cotton Fundamental Situation 2.1 United States - **25/26 Season**: The supply of US cotton was relatively loose. The planting area decreased by 16.8% to 9.3 million acres, the yield decreased slightly by 1% to 3.107 million tons, and the ending inventory increased by 12.5% to 980,000 tons. The export signing progress was slow, but there is a possibility of improvement in the second half of the season [20][29][30] - **26/27 Season**: The planting area is expected to decrease by about 3.3% to around 9 million acres. The yield is estimated to be between 2.94 - 3.31 million tons. The supply - demand pattern is expected to tighten, and the ICE cotton price is estimated to operate between 60 - 80 cents per pound [34][35][45] 2.2 India - **25/26 Season**: The production is expected to be stable at around 5.225 million tons, but there is a possibility of downward adjustment. The consumption may be revised downwards due to trade issues. CCI's large - scale purchases will increase import demand [50][51][53] - **26/27 Season**: The planting area is expected to decline due to low cotton - grain price ratios and flood - damaged farmer incomes [62] 2.3 Brazil - The 26/27 season's planting and production are expected to decline slightly. As of December 20, 2025, the planting progress was 16.9%, 3 percentage points slower than the previous year. Different institutions have different estimates of the production decline, generally around 5 - 10% [65][66][67] 2.4 Global - **25/26 Season**: The global cotton supply - demand is in a loose balance, with production slightly increasing by 0.4% to 26.081 million tons and consumption slightly decreasing by 0.3% to 25.824 million tons [70] - **26/27 Season**: The global planting area is expected to decrease by about 5%, and the production is estimated to decline by 800,000 - 1.5 million tons. The consumption is expected to increase slightly by about 1.2% (310,000 tons), resulting in a supply - demand shortage of 800,000 - 1.5 million tons [73] 2.5 Summary and Market Outlook of the International Cotton Market - The market focus will gradually shift to the 26/27 season. The global economic recovery is expected to improve cotton demand, and the supply - demand situation in the 26/27 season is expected to tighten. The ICE cotton price is estimated to operate between 60 - 80 cents per pound [82][85][86] 3. Domestic Cotton Fundamental Situation 3.1 25/26 Season Xinjiang Cotton - The output is expected to increase, with the estimated output between 7.3 - 7.5 million tons. The seed - cotton purchase price was stable, and the ginning mills' processing and sales progress was fast [87][91][94] 3.2 2026 Xinjiang Cotton Planting Area - It is likely to be reduced, but the reduction幅度 is uncertain. Policy regulation and farmers' planting willingness are the key factors [95][97][99] 3.3 Commercial Inventory - Although the domestic cotton production increased in the 25/26 season, the commercial inventory was basically the same as the previous year. The market is worried about a repeat of the supply shortage in the 24/25 season [101][102] 3.4 Imports - **Cotton**: The import quota is expected to be strictly controlled in the 25/26 season, with an estimated commercial import volume of about 1.1 million tons [104] - **Cotton Yarn**: The import volume is expected to increase by more than 300,000 tons, depending on the future internal - external cotton price difference [105] 3.5 Downstream Textile Industry - The industry is highly competitive, with low profits. The cotton - yarn social inventory is relatively healthy, but there are blockages in the downstream weaving mills and their subsequent sectors [110][113][119] 3.6 Terminal Textile and Apparel - **Export**: The export of textile and apparel is resilient. The demand from Belt and Road countries stabilizes textile exports, and the export to the US and the EU is expected to improve in 2026 [127][134][139] - **Domestic Demand**: It is expected to maintain a moderate growth trend, supported by policy but also affected by factors such as the real - estate market and industry competition [157] 3.7 Domestic Supply - Demand Balance Sheet - **25/26 Season**: The supply - demand is expected to be in a tight balance, with an estimated output of about 7.7 million tons, an import of about 1.1 million tons, and a consumption of 8.6 - 8.7 million tons [160] - **26/27 Season**: The supply - demand gap is expected to widen, and the state may need to issue additional import quotas or conduct state reserve sales [162] 4. Summary and Outlook - Internationally, the supply - demand outlook is tightening, and the ICE cotton price is expected to be volatile and bullish in 2026, with an estimated range of 60 - 80 cents per pound [165] - Domestically, the Zhengzhou cotton market is generally optimistic in 2026, with an estimated range of 13,300 - 16,500 yuan per ton. Attention should be paid to factors such as inventory depletion, imports, and consumption [167] 5. Strategy Recommendations - **Unilateral**: It is recommended to take a long position on dips [4][170] - **Arbitrage**: Consider the 5 - 9 reverse spread, but the weakening space of the spread is expected to be limited [4][170]

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

Market Overview - The cotton futures contract 2605 closed at 14,255 CNY/ton, an increase of 75 CNY/ton or 0.53% from the previous day [2][7] - The spot price for 3128B cotton in Xinjiang was 15,086 CNY/ton, up by 5 CNY/ton, while the national average price was 15,279 CNY/ton, an increase of 8 CNY/ton [2][7] Supply and Demand Analysis - The USDA made minor adjustments to global cotton supply and demand data, with a slight reduction in both production and consumption for the 2025/26 season, leading to a marginal increase in ending stocks [3][8] - U.S. cotton production has been slightly adjusted upwards, resulting in increased inventory pressure after two months of adjustments [3][8] - The northern hemisphere is experiencing a concentrated harvest of new cotton, creating temporary supply pressure, while global textile consumption remains weak [3][8] Domestic Market Insights - Domestic cotton production is expected to continue increasing in the 2025/26 season, with commercial inventories showing seasonal growth due to the ongoing harvest [3][8] - Despite the seasonal supply being ample, the sales pace in Xinjiang is accelerating, reducing hedging resistance in the market [3][8] - Demand remains weak with few new orders, but market sentiment is improving as the double festival approaches, leading to smoother sales of finished products [3][8] Strategic Outlook - The strategy is neutral to slightly bullish, as downstream capacity expansion is expected to increase domestic cotton consumption [4][9] - With low expectations for import volumes, the supply-demand balance for the new season is not anticipated to be overly loose, especially with increasing expectations of reduced planting in Xinjiang for 2026 [4][9]

Report Industry Investment Ratings - Cotton: Neutral to bullish [3] - Sugar: Neutral to bearish [6] - Pulp: Neutral [8] Core Views - Cotton: The 25/26 global cotton production and demand both decrease, and the ending stocks increase slightly. In the short - term, ICE US cotton is under pressure, while in the long - term, it has limited downward space. In China, the supply is abundant in the short - term, but the downstream demand is weak. However, the improvement in spinning profits restricts the downward space of cotton prices [2]. - Sugar: The 25/26 global sugar supply surplus pattern remains unchanged. Although the short - term factors support the rebound of raw sugar prices, the upside space is limited. Zhengzhou sugar has sufficient short - term supply, but its low valuation restricts the further decline [5]. - Pulp: Overseas pulp mills have shutdown and maintenance news. European port pulp inventory has decreased, but the domestic terminal demand is still insufficient. However, the decline in port inventory and the expansion of downstream paper production capacity may support the pulp prices to stabilize gradually [7]. Summary by Related Catalogs Cotton Market News and Important Data - Futures: The closing price of cotton 2605 contract was 13,960 yuan/ton yesterday, up 35 yuan/ton (+0.25%) from the previous day. - Spot: The Xinjiang arrival price of 3128B cotton was 14,978 yuan/ton, unchanged from the previous day; the national average price was 15,139 yuan/ton, down 5 yuan/ton. - Import: In November 2025, China's cotton imports were 120,000 tons, a month - on - month increase of 30,000 tons (34.4%) and a year - on - year increase of 10,000 tons (9.4%). From January to November 2025, the cumulative imports were 890,000 tons, a year - on - year decrease of 64.0% [1]. Market Analysis - International: The USDA's adjustment of global cotton supply - demand data this month is small. The US cotton production increases slightly, and there is greater inventory pressure. The short - term ICE US cotton is under pressure, and the long - term upward driver is not clear. - Domestic: China's cotton production in the 25/26 season continues to increase. The short - term supply is abundant, but the downstream demand is weak. The improvement in spinning profits restricts the downward space of cotton prices [2]. Strategy Be neutral to bullish, focus on the opportunity of going long on the 05 contract at low prices. Pay attention to the change of the cotton target price policy next year [3] Sugar Market News and Important Data - Futures: The closing price of sugar 2605 contract was 5,102 yuan/ton yesterday, down 37 yuan/ton (-0.72%) from the previous day. - Spot: The spot price of sugar in Nanning, Guangxi was 5,270 yuan/ton, down 50 yuan/ton; in Kunming, Yunnan was 5,220 yuan/ton, down 25 yuan/ton. - Import: In November 2025, China's sugar imports were 440,000 tons, a year - on - year decrease of 90,000 tons. From January to November 2025, the cumulative imports were 4.34 million tons, a year - on - year increase of 380,000 tons. As of the end of November in the 25/26 season, the imports were 1.19 million tons, a year - on - year increase of 120,000 tons [4]. Market Analysis - Raw sugar: Brazil's sugarcane harvest is accelerating, India's exports are difficult to increase in the short - term, and Thailand's sugarcane crushing is delayed. Although the short - term raw sugar price rebounds, the 25/26 global sugar supply surplus pattern restricts its upside space. - Zhengzhou sugar: Guangxi sugar mills are starting production, with short - term sufficient supply. However, the low valuation restricts its downward space [5]. Strategy Be neutral to bearish. Pay attention to the impact of capital on the market, and treat it with a low - level consolidation mindset [6] Pulp Market News and Important Data - Futures: The closing price of pulp 2605 contract was 5,500 yuan/ton yesterday, down 6 yuan/ton (-0.11%) from the previous day. - Spot: The spot price of Chilean Silver Star softwood pulp in Shandong was 5,540 yuan/ton, unchanged from the previous day; the price of Russian softwood pulp was 5,095 yuan/ton, down 10 yuan/ton. - Inventory: The total inventory of pulp in 1 region and 8 ports decreased by 1.39% week - on - week, and the decline narrowed by 3.50 percentage points [6]. Market Analysis - Supply: Overseas pulp mills have shutdown and maintenance news, such as Domtar closing the Crofton paper mill and Finns Group's Rauma pulp mill having a temporary shutdown. - Demand: The European port pulp inventory in October decreased, showing some improvement in demand. In China, the terminal demand is insufficient, but the decline in port inventory and the expansion of downstream paper production capacity may support the pulp prices to stabilize [7]. Strategy Be neutral. Although the pulp price has risen strongly recently, the lack of substantial improvement in the supply - demand situation restricts its upside space. Pay attention to the impact of the remaining Russian softwood pulp warehouse receipts on the market [8]

Group 1: General Information - Reported industry: Cotton [1] - Report date: December 18, 2025 [2] Group 2: Core Views - Zhengzhou cotton is under pressure and adjusting, but the overall upward trend remains unchanged. The domestic cotton market has support from domestic demand, while the overseas market shows limited adjustments and an expanding price difference between domestic and foreign markets [7][8] Group 3: Market Review and Operation Suggestions Market Review - Spot market: The latest cotton price index for grade 328 is 15,144 yuan/ton, up 14 yuan/ton from the previous trading day. The negotiated price for machine-picked cotton in North and South Xinjiang for the 2025/26 season is around 14,750 yuan/ton on a net weight basis [7] - Cotton yarn market: Trading is average, with few new orders. Only high-count yarns are selling well. Cotton yarn prices are temporarily stable, but some large manufacturers are offering significant discounts to clear inventory. Xinjiang textile enterprises are barely making a profit, while inland enterprises continue to lose money [7] - Grey cloth market: Trading has improved slightly in some areas but remains dull overall. Orders are being repeated quickly, but shipments have not increased significantly [7] Macro and Overseas Markets - Macro: The prospect of a peace agreement between Russia and Ukraine seems to be strengthening, causing oil prices to decline continuously and dragging down the performance of the external market [8] - Overseas: The USDA's December global cotton supply and demand report shows a slight decrease in both production and consumption, with a slight accumulation of global ending stocks. US cotton production has increased slightly, and stocks are mainly accumulating. Overall, the adjustment is limited, and US cotton remains in a weak oscillation. The price difference between domestic and foreign markets continues to widen [8] Domestic Market - Supply: As of December 16, 2025, the cumulative national inspection volume is 5.5196 million tons, an increase of 79,100 tons from the previous day. The commercial inventory is still in the seasonal accumulation stage, reaching 4.6836 million tons at the end of November [8] - Demand: The current operating rate has decreased slightly. The profit and cash flow of textile enterprises have deteriorated marginally, but the pressure on finished product inventory is still not significant. In November, the domestic revenue from clothing, footwear, and textiles was 154.2 billion yuan, a year-on-year increase of 3.5%, indicating that domestic demand support still exists [8] Group 4: Industry News - As of December 16, 2025, 1,082 cotton processing enterprises across the country have processed and conducted notarized inspections on cotton in accordance with the reform plan for the cotton quality inspection system. The cumulative national inspection volume is 24,451,412 bales, totaling 5.5196 million tons, an increase of 79,100 tons from the previous day. Among them, the inspection volume in Xinjiang is 24,181,404 bales, totaling 5.4591 million tons, an increase of 78,000 tons from the previous day; the inspection volume in inland areas is 151,147 bales, totaling 33,500 tons [9] Group 5: Data Overview - The report provides multiple charts related to cotton, including futures prices, basis changes, spreads between different contracts, commercial and industrial inventories, and exchange rates [14][16][18]

Report Overview - Report Date: December 16, 2025 [2] - Industry: Cotton [1] - Research Analysts: Yu Lanlan, Lin Zhenlei, Wang Haifeng, Hong Chenliang, Liu Youran [3] 1. Investment Rating - No investment rating information is provided in the report. 2. Core View - The trading center of Zhengzhou cotton continues to move upward. The short - term market focuses on the 2026/27 Xinjiang cotton target price area control policy, and Zhengzhou cotton maintains a relatively strong trend with the pressure level gradually moving up [7][8]. 3. Summary by Section 3.1 Market Review and Operation Suggestions - **Domestic Spot Market**: The latest cotton price index for grade 328 is 15,060 yuan/ton, down 2 yuan/ton from the previous trading day. The transaction price of machine - picked cotton in Xinjiang for the 2025/26 season is around 14,750 (gross weight). The base price for low - basis transactions of the same quality is CF01 + 800 - 900, and most base price quotes are still above 900 [7]. - **Domestic Downstream Market**: The trading in the pure - cotton yarn market is average with few new orders, only high - count yarns have good sales. The price of pure - cotton yarn remains stable for now, some large factories may offer significant discounts to clear inventory. Xinjiang textile enterprises barely maintain profits, while inland textile enterprises continue to lose money. The trading in the all - cotton grey fabric market has improved locally but remains dull overall. Orders are turning over quickly, but shipments have not increased much [7]. - **Overseas Market**: The US Department of Agriculture's December global cotton supply - demand report shows a slight decline in both production and consumption, and a slight accumulation of global ending stocks. US cotton production has increased slightly, and inventory accumulation is the main trend. Future attention should be paid to the sales progress of US cotton and changes in CFTC positions [8]. - **Domestic Market Data**: As of December 14, 2025, the cumulative inspection volume nationwide is 5.3736 million tons. The commercial inventory is in the seasonal accumulation stage, reaching 4.6836 million tons at the end of November. The current operating rate has decreased slightly, the marginal deterioration of textile enterprises' profits and cash flow is small, and the finished - product inventory pressure is still not large. In November, the domestic revenue from clothing, footwear, and textiles was 154.2 billion yuan, a year - on - year increase of 3.5%, indicating that domestic demand support still exists [8]. 3.2 Industry News - In November 2025, China's revenue from clothing, footwear, and textiles was 154.2 billion yuan, a year - on - year increase of 3.5%. From January to November 2025, the cumulative revenue was 1.3597 trillion yuan, a year - on - year increase of 3.5%, with the growth rate unchanged from the previous month [9]. - As of the week ending November 18, according to CFTC data, the non - commercial long positions of US cotton futures funds were 73,671 (+4,533) contracts, turning from a decrease to an increase; the short positions were 117,858 (- 870) contracts, decreasing for the fifth consecutive week; the total ICE positions were 279,627 (-16,722) contracts, decreasing for the second consecutive week. The net long ratio was - 15.8%, a month - on - month increase of 0.9 percentage points and a year - on - year decrease of 2.8 percentage points [9]. 3.3 Data Overview - The report provides multiple data charts, including cotton futures prices, cotton basis changes, spreads between different cotton futures contracts, cotton commercial and industrial inventories, warehouse receipt volumes, and exchange rates (USD/CNY and USD/INR), with data sources from Wind and the Research and Development Department of CCB Futures [14][16][20][28][30].

1. Report Industry Investment Rating No information provided on the industry investment rating. 2. Core View of the Report In the 2024 - 25 season, global cotton demand grew steadily driven by China and the US, but the significant increase in production led to weak prices. In the domestic market, due to a sharp reduction in imports, the spot market was tight, prices were relatively firm, and the basis was high with a large gap between domestic and international prices. In the 2025 - 26 season, global production will continue to grow, while the demand side has uncertainties as China's economy is expected to recover but the US economy is uncertain. Considering the tight domestic spot market, cotton prices are expected to remain in a volatile and slightly upward - trending pattern next year [1][3]. 3. Summary by Directory 3.1 Macro Factor Analysis - **Gradual recovery of social retail data**: From January to October 2025, China's social consumer goods retail market showed stable growth, structural optimization, and urban - rural coordination. The total retail sales from January to October reached 4.12169 trillion yuan, a year - on - year increase of 4.3%. With policy and technological support, the annual total is expected to exceed 5 trillion yuan [4][7]. - **Relatively large pressure on price levels**: In 2025, China's prices showed a "low - then - high, moderately recovering" trend. The CPI turned positive in October (up 0.2% year - on - year) and then declined slightly in November (down 0.5% year - on - year). The PPI turned positive in October (up 0.1% month - on - month) and then decreased in November (down 0.3% month - on - month), but the year - on - year decline continued to narrow. In 2026, prices are expected to rise moderately [8][11]. - **Expected steady recovery of the macro - economy**: With policy changes, the macro - economy is expected to show a steady recovery. On the supply side, measures include increasing high - quality service supply and reducing over - capacity. On the demand side, external demand from the US and Europe is expected to be stable, and domestic demand potential lies in service consumption [12][13]. - **Strong resilience of the US economy**: In November, the US PMI was supported by the service sector, with manufacturing declining, consumer spending slowing, and corporate investment to be further restored. The third - quarter GDP growth rate was 3.9% quarter - on - quarter annualized. The employment market showed some signs of recovery, but there were still risks of layoffs. The market's expectation of a December interest - rate cut fluctuated greatly [14][21]. 3.2 Cotton Supply Analysis - **Slightly loose global supply - demand balance**: According to the USDA's November report, in the 2025/26 season, global cotton production is expected to be 26.145 million tons, an increase of 2.0% from September; consumption is expected to be 25.883 million tons, an increase of 0.04%; and the ending inventory is expected to be 16.532 million tons, an increase of 3.8%. The ending inventory has reached a recent high [23]. - **Tight domestic supply - demand situation**: In the 2025/26 season, the domestic beginning inventory is 6.16 million tons, and the production is 7.42 million tons. The total demand is expected to be 8.45 million tons, with the ending inventory decreasing to 6.33 million tons. The domestic market is relatively tight due to reduced imports and stable consumption [25]. - **Tight commercial and industrial inventories**: As of November 15, the national commercial cotton inventory was 3.6397 million tons, an increase of 24.2% from the end of October but 5.31% lower than the same period last year. The industrial inventory was 931,400 tons, an increase of 59,400 tons year - on - year. The overall inventory is still limited [26]. 3.3 Cotton Spinning Consumption Analysis - **Strong US consumption**: From January to August 2025, the US textile and clothing imports increased by 4.43% in volume and 1.47% in value year - on - year. The cotton product imports increased by 3.83% in volume and 4.66% in value. In September, the retail sales of clothing and accessories increased by 6.65% year - on - year [31]. - **Export performance with high - then - low trend**: In October 2025, China's textile and clothing exports were 22.262 billion US dollars, a year - on - year decrease of 12.59%. From January to October, the exports were 243.936 billion US dollars, a year - on - year decrease of 1.58%. The export situation was better in the first half of the year [34]. - **Steady growth of domestic demand**: In October 2025, the retail sales of clothing, shoes, hats, and textiles were 147.1 billion yuan, a year - on - year increase of 6.3%. From January to October, the cumulative retail sales were 1205.3 billion yuan, a year - on - year increase of 3.5% [38]. 3.4 Main Concerns - **Changes in Xinjiang cotton planting policy**: The continuous increase in Xinjiang's cotton planting area and production has put pressure on the supply - demand balance and increased subsidy costs. The direct subsidy policy is likely to be adjusted, and there may be other policies to adjust the planting area [43]. - **Changes in the RMB exchange rate**: With the depreciation of the US dollar and the strength of China's manufacturing, the RMB is appreciating, which may bring pressure on textile and clothing exports [44]. - **Sustainability of US consumption**: Although the US textile and clothing consumption has been strong, there are concerns about the US economy due to weak employment data and PMI. However, the Fed's interest - rate cuts may support the economy [45]. 3.5 Market Outlook In 2026, the global cotton market is expected to see both supply and demand increase. The domestic spot market will remain tight. With the Fed's interest - rate cuts and China's economic recovery, cotton prices are expected to be volatile and slightly upward - trending, but attention should be paid to policy, exchange - rate, and consumption changes [46].