1. Report Industry Investment Rating - Not provided in the content 2. Core Viewpoints of the Report - In June, the US cotton planting intention report was bearish as the USDA's estimated cotton planting area in the US for 2025 was higher than market expectations. Domestically, the expected positive outcome of the China - US negotiations at the end of June supported cotton prices. However, from a fundamental perspective, the rapid strengthening of the basis was unfavorable for downstream consumption, the inventory reduction speed slowed down, and import quotas might be issued in the future. Overall, short - term cotton prices may continue to fluctuate, and attention should be focused on the implementation of the China - US negotiation results [9]. 3. Summary by Directory 3.1 Monthly Assessment and Strategy Recommendation - **International Market Review**: In June, US cotton futures prices fluctuated within a narrow range. As of June 30, the closing price of the December contract of US cotton futures was 68.04 cents per pound, up 0.23 cents per pound from the previous month, a rise of 0.34%. The USDA's planting intention report showed that the estimated cotton planting area in the US for 2025 was 10.12 million acres, higher than the market's previous estimate of 9.735 million acres, and the actual planting area in 2024 was 11.183 million acres. As of June 29, 2025, the good - to - excellent rate of US cotton was 51%, exceeding the level of the same period last year [9]. - **Domestic Market Review**: In June, Zhengzhou cotton prices rebounded. As of June 30, the closing price of the September contract of Zhengzhou cotton was 13,740 yuan per ton, up 465 yuan per ton from the previous month, a rise of 3.5%. In May 2025, China imported 40,000 tons of cotton, a year - on - year decrease of 220,000 tons. From January to May 2025, China's cumulative cotton imports were 440,000 tons, a year - on - year decrease of 1.21 million tons. As of the end of May in the 2024/25 season (from August to the following July), China's cumulative cotton imports were 1.07 million tons, a year - on - year decrease of 1.86 million tons. On June 27, the Chinese and US sides further confirmed the details of the framework, and the US would cancel a series of restrictive measures against China [9]. - **Viewpoints and Strategies**: The US cotton planting intention report in June was bearish. Domestically, the expected positive outcome of the China - US negotiations supported cotton prices, but the rapid strengthening of the basis was unfavorable for downstream consumption, and import quotas might be issued. Short - term cotton prices may continue to fluctuate, and attention should be paid to the China - US negotiation results [9]. - **Fundamental Assessment**: As of June 30, 2025, the basis was 1,421 yuan per ton, the Zhengzhou cotton 9 - 1 spread was - 20 yuan per ton, the spinning spot profit was - 1,762 yuan per ton, the Zhejiang - Xinjiang spread was 245 yuan per ton, the FC index M 1% was 14,021 yuan per ton, and the FC index M sliding - scale duty was 14,637 yuan per ton. The short - term cotton price may continue the rebound trend, and attention should be paid to the China - US negotiation results [10]. - **Trading Strategy Recommendation**: Not provided [11] 3.2 Domestic Market Situation - **Cotton Production**: Relevant data on China's cotton processing and inspection quantity and national cotton processing volume are presented in figures [38][39] - **Cotton Imports**: In May 2025, China imported 40,000 tons of cotton, a year - on - year decrease of 220,000 tons. From January to May 2025, cumulative imports were 440,000 tons, a year - on - year decrease of 1.21 million tons. As of the end of May in the 2024/25 season, cumulative imports were 1.07 million tons, a year - on - year decrease of 1.86 million tons [9][40] - **US Exports to China**: Data on the US's cumulative and weekly export contract volumes to China are provided in figures [42][43] - **Cotton Yarn Imports**: Data on China's monthly and annual cumulative cotton yarn import volumes are presented in figures [44][45] - **Downstream Operating Rates**: Data on the operating rates of spinning and weaving factories are provided in figures [46][47] - **Cotton Sales and Transactions**: Data on the national cotton sales progress and the daily trading volume of the Light Textile City are presented in figures [48] - **Cotton Inventory**: Data on China's weekly commercial cotton inventory and the combined monthly commercial and industrial inventory are presented in figures [49][50] - **Spinning Mill Inventories**: Data on the cotton and yarn inventories of spinning mills are presented in figures [51][52] 3.3 International Market Situation - **CFTC Positions**: Data on CFTC fund and commercial net positions are presented in figures [55][56] - **US Planting Situation**: Data on the proportion of US cotton - planting areas without drought and the cotton good - to - excellent rate are presented in figures [57][58] - **US Production Situation**: Data on the bi - weekly and cumulative cotton processing volumes in the US are presented in figures [59][60] - **US Yield and Planting Area**: Data on the estimated US cotton yield and planting area are presented in figures [61][63] - **US Export Contract Progress**: Data on the US's current - year cumulative and weekly cotton export contract volumes are presented in figures [66][67] - **US Export Shipment Volume**: Data on the US's annual cumulative cotton export shipment volume and progress are presented in figures [68][69] - **US Supply and Inventory - to - Consumption Ratio**: Data on the US cotton supply surplus/shortage and inventory - to - consumption ratio are presented in figures [70] - **Brazil Yield and Planting Area**: Data on Brazil's cotton planting area and yield are presented in figures [71][72] - **Brazil Export Volume**: Data on Brazil's cotton export volume are presented in figures [74][75] - **Brazil Supply and Inventory - to - Consumption Ratio**: Data on Brazil's cotton supply surplus/shortage and inventory - to - consumption ratio are presented in figures [77] - **India Yield and Planting Area**: Data on India's cotton planting area and yield are presented in figures [79][80] - **India Consumption and Imports/Exports**: Data on India's cotton consumption, import, and export volumes are presented in figures [82][83] - **India Supply and Inventory - to - Consumption Ratio**: Data on India's cotton supply surplus/shortage and inventory - to - consumption ratio are presented in figures [85] 3.4 Spread Trend Review - **China Cotton Price Index and Basis**: Figures show the China cotton price index and the basis trend of the Zhengzhou cotton main contract [27] - **Import Profit**: Figures show the price differences inside and outside the country under 1% tariff and sliding - scale duty [29] - **Zhengzhou Cotton Spread**: Figures show the spreads of Zhengzhou cotton 1 - 5 and 9 - 1 [31] - **Regional Spread and Spinning Mill Profit**: Figures show the Zhejiang - Xinjiang spread and the spinning mill's spot profit [32] - **US Cotton Spread**: Figures show the spreads of US cotton 12 - 3 and 7 - 12 contracts [34] - **External Market Spread**: Figures show the US - Brazil spread and the difference between FCindexM1% and CotlookA index 1% tariff [35]

Group 1: Report's Core View - This week, cotton prices showed a volatile trend. Abroad, the weather in US cotton - growing areas has been favorable recently, with increased rainfall alleviating the poor soil moisture in the western regions. As of June 17, the drought - affected area in US cotton - growing areas dropped to 3%, lower than last year. Last week, the good - to - excellent rate of US cotton was 48%, at the average level of previous years. US cotton export net sales reached 358,100 bales last week, a significant increase. The external market is a mix of bullish and bearish factors, with US crude oil rebounding after a decline due to geopolitical factors and the US dollar index stabilizing as the Fed maintains the interest rate. In the domestic supply side, the current commercial cotton inventory is continuously being consumed, and cotton imports are scarce. The downstream demand is in the off - season, resulting in a lackluster cotton price under the situation of weak supply and demand. The new cotton sowing in Xinjiang is completed, and the weather in the growing areas is normal, with good cotton growth. The strategy is that with the mix of bullish and bearish factors, US cotton prices continue to decline. Currently, the new cotton sowing in China is completed, the weather in growing areas is favorable, the commercial inventory is decreasing, and cotton imports are low. Under the weak supply - demand situation, the cotton price remains stable. Waiting for new guidance, the Zhengzhou cotton will continue to move in a volatile manner in the short term [6]. Group 2: Market Performance Review - As of the close on June 20, the ICE US cotton 12 contract closed at 66.76 cents per pound, down 1.14 points from last week's close, with a weekly decline of 1.68%. The CF2509 contract closed at 13,495 yuan per ton, unchanged from last week [8]. Group 3: Fundamental Analysis US Cotton Sowing and Growth - As of the week of June 15, the good - to - excellent rate of US cotton was 48% (49% the previous week, 54% in the same period last year), the planting rate was 85% (76% the previous week, 89% last year, with a five - year average of 90%), the boll - setting rate was 3% (5% last year, five - year average of 3%), and the budding rate was 19% (12% the previous week, 21% last year, five - year average of 17%) [16]. US Cotton Exports - As of the week of June 12, the net export sales of US 2024/2025 upland cotton were 83,000 bales (60,000 bales the previous week), the net sales of 2025/2026 upland cotton were 275,000 bales (36,000 bales the previous week), and the export shipments were 205,000 bales (236,000 bales the previous week) [21]. Domestic Spinning Mills' Operation - As of June 19, the operating load of mainstream spinning mills was 71.7%, a 0.69% decline from the previous week. Spinning mills have limited new orders. Small and medium - sized spinning mills in the inland areas often operate in staggered shifts, with the operating rate reduced to 50% - 60%. The operation of Xinjiang spinning mills is basically stable, maintaining at 80% - 90% [25]. Domestic Spinning Mills' Inventory - As of the week of June 19, the inventory of mainstream spinning mills in terms of cotton storage days was 28.2 days. As of June 19, the yarn inventory of major spinning mills was 30.5 days, a 1.33% increase from the previous week. Currently, the operating rate of Foshan grey fabric factories is 20% - 30%, and the overall raw material procurement is cautious. The raw material inventory of yarn enterprises has accumulated, with the inventory of some large factories in Xinjiang around 35 - 40 days and that of inland enterprises around 17 - 28 days [28]. Domestic Cotton Inventory - As of June 20, 2025, the total commercial cotton inventory was 2.9915 million tons, a decrease of 106,500 tons (3.44% decline) from the previous week. Among them, the commercial cotton in Xinjiang was 2.1193 million tons, a decrease of 87,100 tons (3.95% decline) from the previous week, and the commercial cotton in inland areas was 447,500 tons, a decrease of 1,000 tons (0.22% decline) from the previous week. As of June 19, the inventory of imported cotton at major ports decreased by 4.15% from the previous week, with a total inventory of 424,700 tons, and the inventory continued to decline during the week [30].