1. Report Industry Investment Rating - Not provided in the given content 2. Core Viewpoints of the Report - For the domestic cotton market, the reduction of cotton - planting area in Xinjiang in the 2026/27 season provides cost and supply support. The "Golden March and Silver April" textile peak season with increased replenishment demand and high - level downstream enterprise operations offer upward impetus. However, the release of sliding - duty quotas, large import volume due to the wide price gap between domestic and international cotton, and weak downstream spinning profits may limit price increases. The overall price range is expected to be around 14,500 - 16,000 yuan/ton, and if the reduction in planting area exceeds expectations, prices may rise further [1][33]. - In the international market, the global supply - demand pattern is tightening. Drought in the US cotton - producing areas and the high probability of El Niño weather may lead to a decrease in cotton production. The current low price of US cotton and China's purchase demand will support international cotton prices [2][33]. - The operation suggestion is to view Zhengzhou cotton from a medium - term oscillatory perspective and mainly go long on dips [3][34]. 3. Summary by Directory 3.1 Market Review - **Domestic Market**: In the first quarter, Zhengzhou cotton fluctuated upward, rising first and then falling. The main contract price ranged from 14,500 to 15,765 yuan/ton. The reduction of inventory, increased demand, and concerns about new - season supply were the core supports, while the quota was only a short - term disturbance [5]. - **International Market**: In the first quarter, US cotton showed a strong and upward - trending oscillation. The ICE cotton futures main contract price ranged from 60 to 68.71 cents/pound. The drought in the main - producing areas and the expectation of a supply shortage were the core supports [6]. 3.2 Domestic Market Analysis - **Domestic Production**: As of March 24, 2026, the inspected cotton quantity was 33,652,621 bales, with a weight of 7.6005 million tons, higher than the expected 7.4 million tons. The national cotton - planting intention area in 2026 showed a slight decline, with different situations in different regions. Xinjiang plans to reduce the planting area, and the actual reduction will affect cotton prices [8][10]. - **Consumption and Inventory**: After the Spring Festival, the operating rates of textile and weaving enterprises recovered rapidly. By March 20, the operating rates reached 61.9% and 60.5% respectively, and the finished - product inventories of these enterprises decreased to 14.8 days and 24.8 days [12][15]. - **Imports**: From January to February 2026, China's cotton imports increased significantly year - on - year. The state issued 300,000 tons of sliding - duty quotas, which is expected to keep imports stable and regulate the import order [17][19]. - **Exports**: From January to February 2026, China's textile and clothing exports increased by 17.6% year - on - year. Multiple factors contributed to this growth, but the subsequent export growth may face challenges [21]. 3.3 International Market Analysis - **Global Supply - Demand Situation**: According to the USDA's March report, the US cotton supply - demand situation remained stable, while the global market showed an increase in supply, a decrease in demand, and a slight increase in inventory pressure [25]. - **Northern Hemisphere Planting**: In the 2026/27 season, the cotton - planting intentions in the US and India showed different trends. Weather conditions and crop price ratios are key factors affecting planting. The US may face drought and El Niño risks, while India may face pest risks [28][29]. 3.4 Conclusion and Operation Suggestions - **Domestic Market**: The reduction of cotton - planting area in Xinjiang provides support, but factors such as quota release and import volume may limit price increases. The overall price range is around 14,500 - 16,000 yuan/ton [1][33]. - **International Market**: The global supply - demand pattern is tightening, and factors such as drought and El Niño may lead to a decrease in production. China's purchase demand will support international cotton prices [2][33]. - **Operation Suggestion**: Treat Zhengzhou cotton from a medium - term oscillatory perspective and mainly go long on dips [3][34].

1. Report Industry Investment Rating No relevant content provided. 2. Core Viewpoints of the Report - Globally, the cotton supply - demand pattern is tightening. The 2026/27 global cotton production is expected to be 25.26 million tons, a 3.2% year - on - year decrease, while consumption is expected to reach 26.15 million tons, a 1.2% year - on - year increase, and ending stocks will be 15.5 million tons, a 5.2% year - on - year decrease. This shift from a loose to a supply - shortfall pattern supports long - term cotton prices. Brazilian cotton production is expected to decline significantly, further tightening the global supply. US cotton demand shows signs of recovery [9][30]. - Domestically, after the Spring Festival, the textile industry's resumption of work accelerated, but the rise in cotton and yarn prices has curbed restocking. New - season cotton planting area is expected to be reduced, while demand is supported by capacity expansion. The market is expected to remain in a tight - balance state, but there are risks of price corrections due to delayed downstream resumption and widened price differentials [30]. 3. Summary by Relevant Catalogs 3.1 Cotton Price Trends - International cotton spot weekly average prices declined more than domestic ones, and the price differential between domestic and international cotton slightly widened. ICE cotton futures weekly average price was 6 cents per pound, up 1.28 cents per pound from the previous week. The Cotlook A index weekly average price was 75.85 cents per pound, up 2.54 cents per pound from the previous week. The China Cotton Price Index CC Index3128B weekly average price was 16,448 yuan per ton, up 414 yuan per ton from the previous week [7]. 3.2 Global Cotton Supply and Demand (2026/27) - Global cotton production is expected to be 25.26 million tons, a 3.2% year - on - year decrease; consumption is expected to be 26.15 million tons, a 1.2% year - on - year increase; exports are expected to be 9.58 million tons, a 0.7% year - on - year increase; ending stocks will be 15.5 million tons, a 5.2% year - on - year decrease [9][10]. 3.3 US Cotton Supply and Demand (2025/26) - The planting area is 56.345 million mu, and the harvested area is 47.376 million mu, both unchanged from the previous month. The abandonment rate remains at 15.9%. The yield per mu is expected to be 64 kg, and the production is expected to be 3.03 million tons. Consumption is expected to be 348,000 tons, with no significant adjustment. Exports are expected to be 2.613 million tons, a decrease of 43,000 tons from the previous month. Ending stocks increase by 44,000 tons to 958,000 tons [13][14]. 3.4 Cotton Inspection - As of February 26, 2026, the cumulative graded inspection of US cotton in the 2025/26 season was 3.0387 million tons, with 81.7% of the lint meeting the ICE cotton futures delivery requirements. As of March 3, 2026, the notarized inspection of domestic cotton in the 2025 season was 7.4843 million tons [15][16]. 3.5 Cotton and Yarn Imports - In December 2025, China's cotton imports were 180,000 tons, a 51.3% month - on - month increase and a 31.0% year - on - year increase. In 2025, the cumulative cotton imports were 1.07 million tons, a 59.1% year - on - year decrease. In the 2025/26 season (from September 2025 to December 2025), the cumulative cotton imports were 490,000 tons, a 2.1% year - on - year increase. In December 2025, China's yarn imports were 170,000 tons, an 11.9% year - on - year increase and a 15.1% month - on - month increase. In 2025, the cumulative yarn imports were 1.5 million tons, a 5.4% year - on - year increase. In the 2025/26 season, the cumulative yarn imports were about 590,000 tons, an 18% year - on - year increase [17][19]. 3.6 Cotton Inventory - As of February 2026, China's domestic commercial cotton inventory was 5.5037 million tons, a decrease of 285,000 tons from the previous month, at the historical average level. The industrial cotton inventory was 1.0292 million tons, an increase of 28,200 tons from the previous month, at a relatively high historical level [21]. 3.7 US Cotton Exports - As of February 19, 2026, the cumulative net signed exports of US cotton in the 2025/26 season were 2.046 million tons, reaching 78.30% of the annual expected exports. The cumulative shipments were 1.036 million tons, with a shipment rate of 50.62%. China has signed to import 98,000 tons of US cotton, accounting for 4.81% of the signed US cotton, and has shipped 47,000 tons [23]. 3.8 US Retail Sales - In December 2025, the retail sales of US clothing and clothing accessories (seasonally adjusted) were $27.237 billion, a 5.05% year - on - year increase and a 0.71% month - on - month decrease. In 2025, the cumulative retail sales of US clothing and clothing accessories were $319.066 billion, a 5.62% year - on - year increase [24]. 3.9 Yarn Market - The spot yarn price is generally stable. Rising cotton prices have put some yarn mills in cost - price inversion. The开机 rate of yarn mills in different regions is basically stable. The prices of different yarn varieties are in a certain range [26].

Report Industry Investment Rating No relevant information provided. Core Viewpoints of the Report - In the international market, the expected decline in global cotton production in the 2026/27 season and the narrowing of the supply - demand pattern are expected to provide some support for US cotton prices, which in turn will drive up the domestic cotton prices. In the short term, the market has cooled down, and there is insufficient support for the upward movement of US cotton at the macro - level. In the medium to long term, the ICE US cotton futures price still has room to rise, but it will mainly fluctuate in the short term [11]. - In the domestic market, there are both bullish and bearish factors, but it is still worth looking forward to. In the medium to long term, there is still some room for the cotton price to rise, but there may be a slight short - term correction. The resonance between domestic and foreign cotton prices may increase [12]. Summary by Relevant Catalogs Supply - The expected cotton production in the 2026/27 season is expected to decline year - on - year in the world, the US, and China. The global cotton production is expected to be 25.26 million tons, a 3.2% year - on - year decrease; the US cotton production is expected to be 2.96 million tons, a 2.3% year - on - year decrease; and China's cotton production is expected to be 6.97 million tons, an 8.6% year - on - year decrease [6]. - As of February 26, the national cotton inspection volume was 7.48 million tons, a year - on - year increase of 948,300 tons [6]. - The national cotton inspection volume was about 7.48 million tons, with Xinjiang's inspection volume at 7.1057 million tons as of February 26 [40]. - The sales rate and sales volume of lint cotton are much higher than the same period last year. As of February 12, 2026, the cotton sales volume was 4.991 million tons, and the sales rate was 67.40% [42]. Demand - After the Spring Festival, the operating load of textile enterprises has continued to recover. The inferred monthly cotton consumption based on inventory data remains at a relatively high level [7]. - In December, the retail sales of clothing, footwear, knitwear, and textiles in China were 166.1 billion yuan, a year - on - year increase of 0.6%, and the cumulative retail sales from January to December were 1.5215 trillion yuan, a year - on - year increase of 3.2% [7]. - As of the week of February 27, the comprehensive load of yarn was 39.08%, a week - on - week increase of 14.3 percentage points; the load of pure - cotton yarn mills was 43.02%, a week - on - week increase of 23.85 percentage points [7]. - As of the week of February 27, the comprehensive load of staple - fiber cloth was 32.7%, a week - on - week increase of 10.35 percentage points; the load of all - cotton grey cloth was 30.25%, a week - on - week increase of 9.12 percentage points [7]. - US clothing retail sales remain strong. In December, the monthly retail sales of US clothing and clothing accessories were $27.337 billion, a month - on - month decrease of 0.7% and a year - on - year increase of 5.1% [52]. - The operating rate of Vietnamese textile enterprises increased month - on - month. As of February 27, the weekly operating rate of Vietnam was 68.5%, a month - on - month increase of 8.5 percentage points [55]. Import and Export - The price difference between domestic and foreign cotton under the 1% tariff has continued to widen. As of February 26, the price difference was 3,798 yuan/ton, reaching a new high in the same period in recent years [8]. - As of the week of February 12, the total US cotton export contract volume was 1.985 million tons, a year - on - year decrease of 223,000 tons, and China's contract volume was 98,000 tons, a year - on - year decrease of 93,000 tons [8]. - In December, the monthly export value of clothing and clothing accessories was $13.412 billion, a year - on - year decrease of 10.19%; the cumulative export from January to December was $151.182 billion, a year - on - year decrease of 5% [8]. - In December, China's cotton imports were 180,000 tons, reaching a new high in the year; the monthly import value of cotton yarn was 170,000 tons, reaching a new high in the same period in the past five years [70][75]. - The import cotton price index strengthened month - on - month. As of February 26, the price index of medium - grade imported cotton for 1% quota port pick - up price was 12,883 yuan/ton, a week - on - week increase of 2.93% [83]. Inventory - The commercial cotton inventory decreased more than expected month - on - month. As of mid - February, China's commercial cotton inventory was 5.5037 million tons, a month - on - month decrease of 285,000 tons and a year - on - year decrease of 177,400 tons [9]. - The raw material inventory of spinning enterprises decreased slightly, and the raw material inventory of weaving factories increased slightly, while the finished - product inventory gradually accumulated [9]. - As of the week of February 27, the comprehensive yarn inventory was 23.63 days, a week - on - week increase of 0.7 days; the comprehensive staple - fiber cloth inventory was 32.78 days, a week - on - week increase of 0.16 days [9]. - The US clothing wholesaler inventory increased month - on - month for two consecutive months. In December 2025, the US clothing and clothing accessories wholesaler inventory was $28.561 billion, a month - on - month increase of 0.77% and a year - on - year increase of 2.31% [86]. Price - The center of the cotton spot price has significantly moved up. As of February 27, 2026, the cotton prices in China, Xinjiang, Henan, Shandong, and Zhejiang all increased month - on - month, with increases ranging from 4.76% to 6.81% [24]. - The cotton basis increased month - on - month. As of February 27, 2026, the basis was 1,318 yuan/ton, a month - on - month increase of 209 yuan [26]. - The 5 - 9 spread of cotton increased month - on - month. As of February 27, 2026, the 5 - 9 spread was 0 yuan/ton, a month - on - month increase of 170 yuan [28]. - The price difference between domestic and foreign cotton under the 1% tariff increased month - on - month. As of February 27, 2026, the price difference was 3,959 yuan/ton, a month - on - month increase of 634 yuan [32]. - The closing price of cotton yarn and the price of pure - cotton combed 32 - count yarn increased month - on - month. As of February 27, 2026, the closing price of cotton yarn was 21,245 yuan/ton, a month - on - month increase of 3.71%; the price of pure - cotton combed 32 - count yarn was 21,870 yuan/ton, a month - on - month increase of 2.58% [34]. - The cotton yarn basis fluctuated and declined. As of February 27, 2026, the cotton yarn basis was 625 yuan/ton, a month - on - month decrease of 195 yuan [37]. Option - The historical volatility of cotton options has increased significantly [102].

Cotton Market Insights - The closing price of cotton futures (2605 contract) was 15,350 CNY/ton, a decrease of 30 CNY/ton or 0.20% from the previous day [2][13] - The spot price for 3128B cotton in Xinjiang was 16,548 CNY/ton, an increase of 759 CNY/ton, while the national average price was 16,681 CNY/ton, up by 611 CNY/ton [2][13] - As of February 15, national cotton commercial inventory was 5.5037 million tons, down by 285,000 tons or 4.92% from the end of January, and lower than the same period last year by 177,400 tons or 3.12% [2][13] Textile Industry Data - The industrial cotton inventory of textile enterprises was 1.0292 million tons, an increase of 75,600 tons year-on-year and a 28,200 tons increase month-on-month [2][13] - The disposable cotton inventory for textile enterprises was 1.2178 million tons, a decrease of 68,900 tons year-on-year but an increase of 33,300 tons month-on-month [2][13] - The yarn inventory for textile enterprises was 21.32 days, down by 0.86 days year-on-year and 0.39 days month-on-month [2][13] International Market Analysis - The USDA's latest report forecasts a global cotton production of 25.26 million tons for the 2026/27 season, a decrease of 3.2% year-on-year, while global consumption is expected to rise by 1.2% to 26.15 million tons [3][15] - The ending stocks for the new season are projected at 15.5 million tons, down by 5.2% year-on-year, indicating a tightening supply-demand balance [3][15] - The domestic textile market is expected to gradually recover as businesses resume operations, with strong consumption anticipated due to expanded spinning capacity [3][15] Price Strategy - The market sentiment is neutral, with expectations for a strong performance in the traditional peak season of March and April, influenced by recent price increases in the international market and changes in tariff policies [5][16] - However, short-term price increases may face pressure from domestic and international price differentials [5][16] Sugar Market Insights - The closing price of sugar futures (2605 contract) was 5,285 CNY/ton, an increase of 37 CNY/ton or 0.71% from the previous day [6][17] - In Guangxi, the spot price for sugar was 5,330 CNY/ton, unchanged from the previous day, while in Yunnan, it was 5,170 CNY/ton, also unchanged [6][17] - The Indian Sugar Mills Association (ISMA) forecasts a total sugar production of 32.409 million tons for the 2025/26 season, with a net production of 29.292 million tons after accounting for ethanol diversion, representing a 12% year-on-year increase [6][17] Sugar Market Analysis - The sugar market is currently experiencing a surplus, which is expected to continue to suppress sugar prices in the short to medium term [7][18] - Domestic sugar production is anticipated to increase, although sales data is currently lagging behind expectations [7][18] - The market is also watching for potential tightening of import licenses, which could provide some support to prices [7][18]

Group 1: Middle East Tensions - Intense clashes occurred between Pakistan and Afghanistan along their border, with Pakistan claiming to have killed 36 Afghan armed personnel, while Afghanistan reported 55 Pakistani soldiers killed [3][19][20] - The conflict escalated with Pakistan conducting airstrikes in response to Afghan military actions, which included capturing 15 Pakistani military outposts [20] - The border region has seen intermittent fighting since October 2022, despite previous ceasefire agreements mediated by Qatar and Turkey [5][20] Group 2: Iran-US Negotiations - Iran's Foreign Minister announced significant progress in the third round of indirect negotiations with the US, with technical discussions scheduled to continue in Vienna [6][21] - Iran insists on retaining its right to peaceful nuclear technology and demands the lifting of US sanctions, while the US may require the dismantling of key nuclear facilities [7][22] - The negotiations are crucial for regional stability and have implications for global oil markets [10][26] Group 3: Military Deployments - Satellite images revealed the deployment of 11 US F-22 stealth fighters to Israel, marking a significant military presence in the region [8][23] - The F-22s are advanced aircraft with capabilities for both air-to-air and air-to-ground combat, valued at over $15 billion for the deployed units [9][25] Group 4: Cotton Market Trends - The global cotton market is experiencing a recovery, with prices rising after a period of low volatility, driven by improved macroeconomic conditions and demand expectations [12][28] - The USDA has projected a decrease in global cotton production and ending stocks for the 2026/2027 season, indicating a tightening supply-demand balance [13][29] - Domestic textile production is rebounding, with operating rates in Xinjiang's textile enterprises reaching 85%-90%, further supporting cotton prices [14][30]

Group 1: Middle East Tensions - Intense clashes occurred between Pakistan and Afghanistan along their border, with Pakistan claiming to have killed 36 Afghan militants, while Afghanistan reported 55 Pakistani soldiers killed [3] - The conflict escalated with Pakistan conducting airstrikes in response to Afghan military actions, which included capturing 15 Pakistani military outposts [3] - This border conflict is part of a series of skirmishes that have taken place since October of the previous year, despite previous attempts at a ceasefire mediated by Qatar and Turkey [4] Group 2: Iran-US Negotiations - Iran's Foreign Minister announced that the third round of indirect negotiations with the US has made significant progress, with both sides nearing consensus on certain issues [6] - Technical discussions are scheduled to take place in Vienna, indicating ongoing diplomatic efforts to address nuclear concerns [6] - Iran insists on retaining its right to peaceful nuclear technology and opposes transferring its enriched uranium abroad, while the US may demand the dismantling of key nuclear facilities [7] Group 3: Military Deployments - The deployment of 11 US F-22 stealth fighters to Israel marks a significant military presence in the region, valued at over $1.5 billion [9] - The F-22 is noted for its advanced capabilities, including air-to-air and air-to-ground combat, and is the first aircraft capable of sustained supersonic flight without afterburners [9] Group 4: Cotton Market Trends - The global cotton market is experiencing a recovery, with prices rising after a period of low volatility, driven by improved macroeconomic sentiment and marginally better fundamentals [13] - The USDA has projected a 3.2% decrease in global cotton production for the 2026/2027 season, indicating a tightening supply-demand balance [14] - Domestic cotton demand is expected to increase as textile companies resume normal operations post-holiday, with production rates in Xinjiang reaching 85%-90% [15]

Report Summary 1. Report Industry Investment Rating No information provided. 2. Core Viewpoints - The report maintains the view that the cotton price will move upward in the medium to long term and fluctuate strongly. It is advisable to go long on dips. The core drivers are the tight balance of China's cotton supply - demand structure in the 25/26 season and the possible decline in cotton - planting area in Xinjiang in 2026 [4]. 3. Summary by Relevant Catalogs Price Performance - Today, Zhengzhou cotton opened high and moved higher. The main contract added more than 90,000 lots, breaking through the 15,000 yuan/ton mark and the previous high in early January, closing at 15,285 yuan/ton [2]. Market Review - **Macro - level**: The tariff reduction boosted the commodity market atmosphere. The US Supreme Court ruled that the large - scale tariffs imposed by the Trump administration under the "International Emergency Economic Powers Act" (IEEPA) were invalid. Trump announced a new 10% global temporary tariff starting from February 24, 2026 (valid for 150 days), and then raised it to 15%. The 20% tariff imposed on China by the US since last year has dropped to 15% [2]. - **Industry - level**: The first forecast report of the USDA Agricultural Outlook Forum for the 26/27 season is positive. Globally, the total cotton production is expected to decrease by 3.2% year - on - year, consumption to increase by 1.2%, ending stocks to decrease by 5.2%, and the stock - to - consumption ratio to decline by 6.3%. In the US, the cotton planting area is expected to increase by 1.3% year - on - year, the harvested area to decrease by 2.2%, and the total production to decrease by 2.3%. Consumption remains flat, exports increase by 1.7%, ending stocks decrease by 4.5%, and the stock - to - consumption ratio declines by 6.2%. A decline in the US cotton stock - to - consumption ratio will drive up the medium - to - long - term price center [3]. Outlook for the Future - In the medium to long term, the cotton price is expected to rise. However, in the short term, whether the upward trend continues or slows depends on other factors. The current low price of the external market and the widening internal - external price difference limit the upside of the domestic market. Attention should be paid to the USDA's cotton planting intention report at the end of March, weather conditions, the "Golden March and Silver April" demand season after the Spring Festival, and the Xinjiang target price subsidy policy [4].

Sugar Industry - As of February 15, Thailand's cumulative sugarcane crushing volume reached 63.4728 million tons, a decrease of 4.4602 million tons or 6.57% compared to the same period last year [5] - The sugar content in sugarcane was 12.53%, an increase of 0.16% from 12.37% last year [5] - The sugar production rate was 10.77%, up by 0.197% from 10.573% last year, with total sugar production at 6.8356 million tons, down by 346,700 tons or 4.83% year-on-year [5] - Current spot prices for sugar in Guangxi range from 5,290 to 5,400 CNY/ton, while in Yunnan, prices are between 5,120 and 5,180 CNY/ton, with processing plants quoting between 5,580 and 5,800 CNY/ton, showing stability [5] - The raw sugar market is supported by U.S. tariff issues, leading to strong futures prices, but future price increases may be limited due to expected high production levels in the Northern Hemisphere and Brazil [5] - Domestic sugar factories are in a peak inventory accumulation period during the off-season for consumption, leading to a lack of market drivers and a forecast of continued fluctuations [5] Cotton Industry - On Tuesday, ICE cotton rose by 0.55%, closing at 65.5 cents per pound, while the main contract for Zheng cotton increased by 3.8% to 15,285 CNY/ton, with open interest rising by 92,446 contracts to 759,400 contracts [6] - The cotton price index for 3128B was 16,205 CNY/ton, up by 415 CNY/ton from the previous day [6] - The increase in Zheng cotton prices is driven by several factors, including a more than 2% rise in ICE cotton prices during the domestic spring holiday, and USDA's February agricultural outlook indicating a year-on-year decline in cotton stock-to-use ratios for 2026/27 in major producing countries [6] - Domestic planting area reductions and expectations for target price policy adjustments are becoming clearer as new cotton planting is expected to begin in about a month [6] - Overall, the correlation between domestic and international cotton prices may strengthen, with limited short-term single-direction trends but potential upward space for prices in the medium to long term [6]

1. Report Industry Investment Rating No relevant content provided. 2. Core Viewpoints of the Report - In 2026, the cotton planting area in the US may remain stable with a slight decline, and attention should be paid to whether the planting area in the Southern Hemisphere will decrease [2][105]. - There is uncertainty about the cotton planting area under policy guidance. Although the market speculates that the policy may lead to a decline in the planting area in 2026, it remains unknown whether the policy will be implemented as speculated and whether the implementation intensity can actually reduce the area [2][111]. - The international economic and trade environment is gradually improving, and the phased easing of Sino - US trade relations reduces export tariffs, improving the export outlook for textiles. Coupled with the continuous expansion of Xinjiang's cotton textile production capacity, it is beneficial for domestic cotton consumption [2][111]. - The cotton price was at a low level for a long time in the 2024/2025 season, and the current valuation is in a historically low range. As the supply - demand pattern improves and market sentiment recovers, valuation repair will be an important driving force for price increases [2][111]. 3. Summary According to the Table of Contents 3.1 Market Review - **ICE Narrow - Range Fluctuation**: In 2025, the US cotton production decreased year - on - year. Due to continuous Sino - US tariff conflicts and China's small volume of signing US cotton contracts, the ICE US cotton continuous contract showed a fluctuating trend, mostly in the range of 65 - 68 cents. After the US government's record - breaking shutdown, the price center of ICE US cotton moved down since the third quarter, generally maintaining in the range of 63 - 66 cents [10]. - **ZCE First Declined and Then Rose, with Overall Low Valuation**: Supported by the downstream raw material replenishment and order - grabbing expectations, Zhengzhou cotton rose moderately at the beginning of the year. Affected by tariffs, it started to decline in late February, especially after the US announced the so - called "reciprocal tariffs" at the beginning of April, Zhengzhou cotton tumbled. After the Geneva talks between China and the US in early May, Zhengzhou cotton soared. With the marginal weakening of the negative impact of tariffs and concerns about the supply before the new cotton was listed, Zhengzhou cotton continued to rise until late July. However, due to the uncertainty of Sino - US trade relations and the expectation of new cotton production increase, the overall increase was not significant [10][11]. 3.2 Global Cotton Output Increased Slightly Year - on - Year, Focus on the Cotton Planting Area in the Southern Hemisphere - **Global Cotton Ending Stocks Increased, with Overall Low Pressure**: According to the December USDA report, compared with the previous month, the global cotton beginning stocks estimate increased by 120,000 bales, the production estimate decreased by 290,000 bales, and the consumption estimate decreased by 270,000 bales, with the ending stocks estimate increasing by 40,000 bales. In the 2025/26 season, the global cotton beginning stocks estimate increased by 1.21 million bales year - on - year, the production estimate increased by 510,000 bales, the consumption estimate decreased by 320,000 bales, and the ending stocks estimate increased by 1.36 million bales, but the overall pressure was not great [12]. - **Improved Import Demand for Textiles and Clothing in Europe and the US**: - **Consumer Confidence**: In November, the US Michigan consumer confidence index was 51, down 2.6 points month - on - month and had been declining for three consecutive months, rising to 53.3 in December. The EU consumer confidence index was - 13.6 in November, basically flat month - on - month, and - 12.4 in December, down 1.2 points month - on - month and up 5.1 points year - on - year, remaining at the highest level in the same period in the past three years since March [14]. - **Import Volume**: In September, the EU's textile and clothing imports from China, Vietnam, Bangladesh, and the US were 5.66 billion euros, up 380 million euros month - on - month and slightly up 50 million euros year - on - year. From January to September, the EU's cumulative imports from these four countries were 43.675 billion euros, up 4.213 billion euros year - on - year. In September, the US imported a total of $10.582 billion worth of textiles and clothing, down $1.161 billion year - on - year, a decrease of 9.89%. From January to September, the US's cumulative imports were $90.413 billion, down $210 million year - on - year. China's share in the US market dropped significantly, with cumulative imports from China being $16.912 billion, down $6.352 billion year - on - year, and the market share dropping by 6.96 percentage points compared with the same period last year [16]. - **开机率 in Southeast Asia**: The开机率 of Indian and Vietnamese spinning mills showed a downward trend, while that of Pakistani spinning mills showed an upward trend and was at the highest level in the same period in the past three years, performing the best [22][26]. - **Slow Progress of US Cotton Export Sign - ups**: - **High Ending Stocks and Limited Production Adjustment Space**: In December, compared with November, the US cotton production estimate decreased by 150,000 bales, the consumption estimate decreased by 100,000 bales, and the ending stocks estimate increased by 200,000 bales to 4.5 million bales. The 2025/2026 US cotton planting area was expected to be 9.3 million acres, the harvested area was estimated to be 7.37 million acres, the yield per acre was estimated to be 929 pounds, and the total production was 14.268 million bales, down 145,000 bales year - on - year [29]. - **Slow Overall Sign - ups and a Sharp Drop in China's Sign - ups**: As of the week of November 13, the weekly sign - up of 2025/26 US upland cotton was 42,600 tons, down 36% week - on - week, up 10% from the four - week average, and up 22% year - on - year. The total sign - up volume of US cotton in the 2025/26 season was 1.2706 million tons, accounting for 49% of the annual predicted total export volume, 12 percentage points slower than the same period last year. China's total sign - up volume was 37,000 tons, a significant decrease of 74% compared with the same period last year [37][42]. - **Slow US Cotton Inspection**: As of the week of December 5, 2025, the cumulative inspection volume of US upland cotton + Pima cotton was 2.0085 million tons, accounting for 65.7% of the estimated US cotton production for the year, 11% slower year - on - year. Considering the 10% production reduction this year, the inspection speed was comparable to that of last year [45]. - **Supply - Demand Situation in Other Cotton - Producing Countries**: - **Accumulated Inventory in India**: In the 2025/26 season, India's cotton beginning stocks increased by 710,000 bales year - on - year, the export volume estimate was basically flat year - on - year, the import volume estimate decreased slightly by 240,000 bales year - on - year, and the ending stocks estimate increased by 500,000 bales year - on - year to the highest level in the past three years [50]. - **Divergent Estimates of Brazilian Cotton Production**: Brazilian institutions had different forecasts for the increase or decrease of Brazilian cotton production in 2025/26, but the market expected that the cotton planting area in Brazil would be difficult to increase this season. The USDA report showed that the Brazilian cotton production estimate for the 2025/26 season was 18.75 million bales, a 10% increase year - on - year [58][60]. - **Probable Decrease in Australian Cotton Production**: Affected by factors such as insufficient irrigation water supply, poor soil moisture during the sowing period, rising planting costs, and better returns from competing crops, Australia's cotton planting area was expected to decline significantly in the 2025/26 season. The latest USDA report showed that Australia's cotton production estimate for the 2025/26 season was 4.5 million bales, a 2.3% decrease year - on - year [62]. 3.3 Domestic Market Supply - Demand Situation - **Substantial Increase in Production**: - **Increased Production and Low Imports**: In the 2025/26 season, China's cotton production estimate increased by 1.5 million bales year - on - year to 33.5 million bales, reaching a new high since 2013, and consumption decreased slightly by 500,000 bales to 38.5 million bales. Imports were expected to remain stable with a slight increase, and the ending stocks estimate increased by 320,000 bales year - on - year to 351.62 million bales, at a high level in the past five years [64]. - **Non - Concentrated Pima Cotton Costs and Faster Sales**: As of December 11, the national Pima cotton processing rate was 84%, 2.2 percentage points higher year - on - year, and the sales rate was 41.6%, 23.5 percentage points higher year - on - year [68]. - **Flat Commercial Stocks Year - on - Year**: As of the end of November, the domestic cotton commercial inventory was 4.68 million tons, a significant increase of 1.753 million tons month - on - month due to the listing of new cotton, and basically flat year - on - year, at the highest level in the same period in recent years [72]. - **First Decline and Then Rise in the Domestic - Foreign Price Difference and a Sharp Drop in Cotton Imports**: In October, China imported 90,000 tons of cotton, down 10,000 tons month - on - month and 20,000 tons year - on - year. From January to October, the cumulative cotton imports were 770,000 tons, a significant decrease of 1.6 million tons year - on - year, a decrease of 67.5% [76]. - **Moderate Recovery in Domestic Demand and Poor Exports**: - **Recovery of Cotton Spinning PMI in the Fourth Quarter**: In November, the China Cotton Textile Industry Purchasing Managers' Index (PMI) decreased slightly by 2 points month - on - month, and the decline was significantly narrower than in the same period of last year and the year before. The overall trend of cotton spinning PMI was similar to that of last year, not as good as in 2023, and the peak - season characteristics were not obvious [86]. - **Poor Overall Spinning Mill Operation**: The domestic spinning mill operation load was basically at the lowest level in the same period in the past three years this year, showing a trend of high in the front and low in the back, and the peak - season characteristics were not obvious. As of this week, the spinning mill operation load index was 51, and the finished - product inventory was 27.6 days. The cloth mill operation rate reached a phased high in early April and then fluctuated and declined, and started to recover in August. As of this week, the cloth mill operation load index was 51.7, and the finished - product inventory was 31.2 days [87]. - **Moderate Recovery in Domestic Demand**: In October, the domestic retail sales of textiles and clothing were 147.08 billion yuan, a 6.3% year - on - year increase. From January to October, the cumulative retail sales were 1.20528 trillion yuan, a 3.5% year - on - year increase, and the growth rate was 2.4 percentage points higher than in the same period last year [95]. - **Slight Year - on - Year Decline in Textile and Clothing Exports, with Overall Declines in Exports to the US and ASEAN**: In November, domestic textile and clothing exports were $23.87 billion, a 5.1% year - on - year decrease, and the decline was 7 percentage points narrower than in the previous month. From January to November 2025, the cumulative textile and clothing exports were $267.79 billion, a slight 1.9% year - on - year decrease. Exports to ASEAN and the US decreased significantly, while exports to the EU market remained stable [97]. 3.4 Future Outlook - **Possible Stable but Slightly Declining US Cotton Planting Area, Focus on Whether the Southern Hemisphere's Area Will Decrease**: Based on the soybean/cotton and corn/cotton price - ratio trends, the current price ratios are significantly higher than last year. Judging from the price ratios alone, the US cotton planting area in 2026 is likely to remain stable with a slight decline compared to 2025. The Brazilian cotton planting area is expected to be difficult to increase this season, and the Australian cotton planting area is expected to decline significantly in the 2025/26 season [2][105]. - **Uncertainty about the Cotton Planting Area under Policy Guidance**: In 2026, a new cotton target price will be formulated. The market speculates that the policy may lead to a decline in the cotton planting area in 2026, but it remains unknown whether the policy will be implemented as speculated and whether the implementation intensity can actually reduce the area [111].

Report Summary 1. Industry Investment Rating No investment rating information provided in the report. 2. Core View The report predicts that after this round of rebound, cotton prices will gradually return to a volatile pattern. Although the Fed's interest - rate cut expectation is rising, the support is limited. The global supply - demand pattern is weak, with low demand. In the domestic market, the positive macro - environment and short - term spot resource shortage support the market, and downstream rigid demand persists. [3] 3. Summary by Directory 3.1 Market Review - **US Cotton**: ICE cotton was reported at 63.82 - 64.85 cents per pound, with a Friday closing price of 63.93 cents per pound, a week - on - week decrease of 1.2%. As of November 28, the number of unpriced contracts of sellers on the ON - CALL 2603 contract increased by 634 to 21,716, equivalent to an increase of 10,000 tons from last week. The total number of unpriced contracts of sellers in the 25/26 season increased by 1,001 to 39,293, equivalent to 890,000 tons, an increase of 20,000 tons from last week. The total number of unpriced contracts of ICE sellers increased to 48,920, equivalent to 1.11 million tons, an increase of 1,482 (or 30,000 tons) from last week [9]. - **Zhengzhou Cotton**: It was reported at 13,660 - 13,820 yuan per ton, with a Friday closing price of 13,750 yuan per ton, a week - on - week increase of 25 yuan. As of December 5, the number of registered warehouse receipts for No. 1 cotton was 2,709, and the number of forecast warehouse receipts was 2,781, totaling 5,490, equivalent to 230,580 tons [10]. - **Domestic Cotton Spot**: The price center of domestic cotton spot prices moved slightly upward and then fluctuated in a narrow range this week. The one - time price of cotton spot increased, and the sales basis of cotton spot weakened. The one - time price of 2025/26 southern Xinjiang hand - picked cotton and northern Xinjiang machine - picked cotton was mostly quoted at around 14,800 - 14,950 yuan per ton (gross weight), and the actual transaction was slightly discounted. [13][16] 3.2 Domestic Cotton Market - **Supply**: The China Cotton Association predicts that the total cotton output in the 2025/26 season will reach 7.216 million tons, a year - on - year increase of 8.3%, the highest since 2013. The Xinjiang cotton region is expected to produce about 6.911 million tons, a year - on - year increase of 9.2%, accounting for 95.8% of the national total. In October 2025, 90,000 tons of cotton were imported, a year - on - year decrease of 15,800 tons and a month - on - month decrease of 5,000 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). The cumulative import in the 2025/26 season was 185,000 tons, a year - on - year decrease of 17% (or 38,000 tons) [19][26]. - **Demand**: The demand performance is average but still shows resilience, and the operating rate remains flat [29][35]. - **Profit**: The processing profit of ginning mills this week was 722 - 762 yuan per ton, and the immediate profit of spinning mills was - 1,099.6 - - 1,053.4 yuan per ton [38]. - **Inventory**: As of the week of December 8, the national commercial cotton inventory was 4.465 million tons, a week - on - week increase of 285,600 tons, higher than the same period last year by 14,680 tons. At the end of October, the industrial cotton inventory of cotton textile enterprises was 874,200 tons, a month - on - month increase of 42,200 tons [44]. 3.3 International Market - **Global Cotton Supply - Demand**: According to the latest November global cotton production and sales forecast by USDA, the global output was 26.145 million tons, a significant month - on - month increase of 523,000 tons, mainly due to the output adjustments in China and the US. The demand increased slightly to 25.883 million tons, showing an overall bearish trend [46].