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]