Report Summary 1. Report Industry Investment Rating No relevant information provided. 2. Core View of the Report The report focuses on the cotton market, including domestic and US cotton conditions. Domestic cotton spot trading is cold, with stable basis overall and slight adjustments in some areas. The cotton - textile market has general trading, with few new orders. US cotton futures continued to rise, hitting a new high this year, and the market is concerned about the upcoming US Department of Agriculture's planting area intention report due to concerns about rising agricultural product planting costs caused by the Middle - East situation [2][3]. 3. Summary by Directory 3.1 Fundamental Tracking - **Futures Data**: CF2605 closed at 15,420 yuan/ton with a daily increase of 0.52% and a night - session close of 15355 yuan/ton with a - 0.42% change. CY2605 closed at 21,640 yuan/ton with a - 0.14% daily change and a night - session close of 21495 yuan/ton with a - 0.67% change. ICE US cotton 5 closed at 69.44 cents/pound with a 1.76% increase. Trading volume and positions of CF2605 and CY2605 had different changes compared to the previous day [1]. - **Warehouse Receipt Data**: Zhengzhou cotton had 12,444 warehouse receipts, an increase of 100 compared to the previous day, and 339 valid forecasts, a decrease of 91. Cotton yarn had 227 warehouse receipts, a decrease of 2, and 67 valid forecasts, an increase of 162 [1]. - **Spot Price Data**: The price of North Xinjiang 3128 machine - picked cotton was 16,664 yuan/ton, an increase of 80 yuan or 0.48% compared to the previous day. The 3128B index was 16,745 yuan/ton, an increase of 34 yuan or 0.20%. The Cotlook:A index was 78.20 cents/pound, an increase of 0.45 cents or 0.58% [1]. - **Spread Data**: The CF5 - 9 spread was - 125 yuan/ton, with no change compared to the previous day. The spread between North Xinjiang 3128 machine - picked cotton and CF605 was 1,240 yuan/ton, with no change [1]. 3.2 Macro and Industry News - **Domestic Cotton Spot**: Cotton spot trading remained cold, with the basis generally stable and a slight reduction of 10 - 20 yuan/ton in some areas. Different regions had different basis ranges for different cotton grades [2]. - **Domestic Cotton - Textile Enterprises**: The pure - cotton yarn market had general trading, with few inquiries and new orders. Spinning mills mainly executed previous orders, with relatively smooth sales and a slight increase in inventory. The price was basically stable, with spinning mills having firm quotes and traders having some room for price concessions. The all - cotton grey fabric market had a weakening trading atmosphere, with continuous inquiries but no follow - up in transactions [2]. - **US Cotton**: ICE cotton futures continued to rise, hitting a new high this year. Although the weekly US cotton export sales data was average, concerns about rising agricultural product planting costs due to the Middle - East situation made the market more concerned about the upcoming US Department of Agriculture's planting area intention report [3]. 3.3 Trend Intensity The cotton trend intensity is 0, indicating a neutral trend. The trend intensity ranges from - 2 (most bearish) to 2 (most bullish) [5].

1. Report Industry Investment Rating No relevant content provided. 2. Core Viewpoints of the Report - The fundamentals of the cotton market are supportive, and cotton prices are expected to fluctuate with a slight upward trend in the short - term. The international cotton market, especially the US cotton market, is likely to continue range - bound oscillations, while the domestic cotton market's fundamentals remain strong [8][29]. - The sales progress of cotton is still fast, and the easing of Sino - US relations and the expected expansion of Xinjiang textile mills' production capacity in the new year bring certain expectations for cotton consumption, supporting the upward movement of the fundamentals. However, considering the previous reaction of bullish factors and the high internal - external price difference, and the lack of obvious bullish drivers in US cotton in the short - term, Zhengzhou cotton is expected to fluctuate slightly upward in the short - term [41]. 3. Summary by Directory 3.1 International Market Analysis - **US Cotton Market**: The fundamentals have few contradictions, and the US cotton price is expected to continue range - bound oscillations. As of January 16, 2026, the cumulative inspection volume of US upland cotton + Pima cotton accounted for 94.6% of the estimated annual US cotton production, with a year - on - year slowdown of 8%. The weekly deliverable ratio was 75.4%, and the quarterly deliverable ratio was 82.1%, 1.3 percentage points higher year - on - year. The US cotton listing inspection is nearing the end, and the production estimate was slightly lowered in January [8]. - **US Cotton Sales**: As of the week of January 8, the weekly signing volume of 2025/26 US upland cotton was 77,000 tons, a week - on - week increase of 247% and an 89% increase compared to the average of the previous four weeks. The weekly shipment volume was 35,400 tons, a week - on - week increase of 1% and an 8% increase compared to the average of the previous four weeks [8]. - **CFTC Data**: As of January 13, 2026, the net long rate of ICE cotton futures funds was - 15.17% (a week - on - week decrease of 0.03 percentage points) [8]. - **Brazil**: As of January 17, the cotton planting in the 2025/26 season in Brazil was 36.34% completed, a month - on - month increase of 4.4 percentage points, 2.8 percentage points slower year - on - year, and 13.7 percentage points slower than the average of the past three years [8]. - **India**: As of January 15, 2026, the cumulative new cotton listing volume in Pakistan in the 2025/26 season reached 851,000 tons, basically the same year - on - year. The textile mills' procurement was 750,000 tons, a 1% year - on - year decline, and the unsold new cotton was 74,000 tons, a 5% year - on - year decline [8]. - **Global Situation**: According to the latest January global cotton production and sales forecast by USDA, the changes are not significant. The global cotton production in January was 26 million tons, a month - on - month reduction of 80,000 tons; the total consumption increased by 70,000 tons to 25.89 million tons; the ending inventory decreased by 320,000 tons to 16.22 million tons [8]. 3.2 Domestic Market Logic Analysis - **Supply Side**: As of the week of January 15, the national ginning mill operating rate dropped to 36.71%, a month - on - month decrease of 11.59%. As of January 21, 2026, the cumulative public inspection of lint was 7.06 million tons, and the cumulative public inspection volume of Xinjiang cotton was 6.8 million tons. In December, the national commercial cotton inventory was 4.6598 million tons, a year - on - year increase of 99,600 tons [29]. - **Demand Side**: As of January 22, the cumulative sales of lint were 4.409 million tons, at a high level in the same period over the years, an increase of 2.41 million tons compared to the average of the past four years. As of January 15, the operating load of spinning mills in mainstream areas was 64.6%, a 0.15% decrease from the previous week. As of January 16, the gray fabric operating load increased to 48.7. As of the week of January 8, the cotton inventory of spinning mills in mainstream areas was equivalent to 24.59 days of stock [29]. - **Comprehensive Outlook**: The supply side has little change, and the expected reduction in the cotton planting area in the new year supports the market. The demand side shows a fast sales progress and increased downstream stocking willingness. However, considering the approaching Spring Festival, the short - term demand is expected to change little. Zhengzhou cotton is expected to fluctuate slightly upward in the short - term [29]. 3.3 Futures Trading Strategy - **Trading Logic**: The fast cotton sales progress, the easing of Sino - US relations, and the expected expansion of Xinjiang textile mills' production capacity in the new year support the upward movement of the fundamentals. Affected by the macro - sentiment, the cotton price has significantly corrected, and it is expected to fluctuate in the short - term [41]. - **Strategies**: - **Single - side**: It is expected that the US cotton price will likely range - bound oscillate in the short - term, and Zhengzhou cotton's fundamentals remain strong. One can consider building long positions on dips [43]. - **Arbitrage**: Hold a wait - and - see attitude [43]. - **Options**: Hold a wait - and - see attitude [42]. 3.4 Weekly Data Tracking - **Internal - External Price Difference**: Relevant data on the internal - external cotton price difference and the price difference trend between September and January are presented [46][47]. - **Cotton Inventory**: Information on national commercial cotton inventory, spinning mills' industrial cotton inventory, and reserve inventory is provided [49]. - **Spot - Futures Basis**: Data on the basis of cotton and cotton yarn are presented, including the basis of US cotton, the basis of January, May, and September contracts of cotton, and the basis between C32S cotton yarn spot and the active contract of Zhengzhou cotton yarn [52].

1. Report Industry Investment Rating - No information provided in the report 2. Core Viewpoints of the Report - From a fundamental perspective, the peak season was lackluster, but demand was not too bad after the peak season. The downstream operating rate remained at a medium level, and the previous decline in the futures price had digested the bearish news of a domestic bumper harvest. With the rebound of commodities, short - term funds entered the market to push up cotton prices, but there was no strong driving force in the short term. Coupled with the pressure of hedging orders, the probability of Zhengzhou cotton having a unilateral trend is not high [9]. 3. Summary According to the Directory 3.1. Weekly Assessment and Strategy Recommendation - **Market Review**: In the external market, the price of US cotton futures fluctuated within a narrow range this week. As of Friday, the closing price of the March contract of US cotton futures was 63.83 cents per pound, a decrease of 0.12 cents per pound from the previous week, a decline of 0.19%. The spread between the March - May contracts of US cotton was - 1.1 cents per pound, a decrease of 0.04 cents per pound from the previous week. In the domestic market, the price of Zhengzhou cotton rose slightly this week. As of Friday, the closing price of the May contract of Zhengzhou cotton was 13,850 yuan per ton, an increase of 130 yuan per ton from the previous week, an increase of 0.95%. The China Cotton Price Index (CCIndex) 3128B was 15,062 yuan per ton, an increase of 40 yuan per ton from the previous week. The basis was 1,215 yuan per ton, a decrease of 90 yuan per ton from the previous week. The spread between the January - May contracts of Zhengzhou cotton was - 15 yuan per ton, a decrease of 45 yuan per ton from the previous week [9]. - **Industry Information**: As of the week of December 12, the spinning mill operating rate was 65.5%, flat compared with the previous week, 1.3 percentage points lower than the same period last year, and 7.7 percentage points lower than the average of the past five years (73.07%). The national commercial cotton inventory was 4.47 million tons, an increase of 150,000 tons year - on - year. According to the latest December monthly supply - demand report data released by the USDA, the global cotton production forecast for the 2025/26 season was revised down by 60,000 tons to 26.08 million tons compared with November. Among them, the US production forecast was revised up by 30,000 tons to 3.11 million tons; the Brazilian production forecast remained at 4.08 million tons; the Indian production forecast remained at 5.23 million tons; and the Chinese production forecast remained at 7.29 million tons [9]. - **Viewpoints and Strategies**: The probability of Zhengzhou cotton having a unilateral trend is not high, and the recommended trading strategy is to wait and see [9][10][11]. 3.2. Spread Trend Review - The report presents multiple spread trend charts, including the China Cotton Price Index, the basis trend of the main contract of Zhengzhou cotton, import profit, Zhengzhou cotton monthly spreads, the Zhejiang - Xinjiang spread, spinning mill immediate profit, and various spreads of US cotton and other international spreads [24][26][28] 3.3. Domestic Market Situation - **Domestic Cotton Production**: The report shows the processing and inspection quantity of Chinese cotton and the purchase price of Xinjiang seed cotton [38][39]. - **Cotton Import Volume**: It includes monthly and annual cumulative import volumes of Chinese cotton [40][41]. - **US Export Contract Quantity to China**: It shows the cumulative and weekly export contract quantities of the US to China [43][44]. - **Cotton Yarn Import Volume**: It includes monthly and annual cumulative import volumes of Chinese cotton yarn [45][46]. - **Downstream Operating Rate**: It shows the operating rates of spinning mills and weaving mills [48][49]. - **National Sales Progress**: It shows the national cotton sales progress and the daily trading volume of the light - textile city [50][51]. - **Cotton Inventory**: It includes the weekly commercial inventory of Chinese cotton and the monthly inventory of commercial + industrial cotton [53][54]. - **Spinning Mill Raw Material and Finished Product Inventory**: It shows the cotton inventory and yarn inventory of spinning mills [55][56]. 3.4. International Market Situation - **US Planting Situation**: It shows the proportion of the US cotton - planting area without drought and the cotton good - quality rate, as well as the bi - weekly and cumulative processing volumes [59][60][61]. - **US Production and Planting Area**: It shows the US cotton production forecast and planting area [62][64]. - **US Export Contract Progress**: It shows the cumulative and weekly export contract quantities of US cotton in the current year [66][67]. - **US Export Shipment Volume**: It shows the annual cumulative and weekly export shipment volumes of US cotton [68][69]. - **US Supply and Inventory - Consumption Ratio**: It shows the US cotton supply surplus/shortage and inventory - consumption ratio [70]. - **Brazilian Production and Planting Area**: It shows the Brazilian cotton planting area and production [71][72]. - **Brazilian Export Volume**: It shows the Brazilian cotton export volume [74][75]. - **Brazilian Supply and Inventory - Consumption Ratio**: It shows the Brazilian cotton supply surplus/shortage and inventory - consumption ratio [77]. - **Indian Production and Planting Area**: It shows the Indian cotton planting area and production [79][80]. - **Indian Consumption and Import - Export**: It shows the Indian cotton consumption, import - export volume, supply surplus/shortage, and inventory - consumption ratio [82][83][85].

Core Viewpoint - Cotton prices have shown a strong upward movement recently, but there are no substantial factors to support a sustained bullish trend in the market [1][3][4] Supply and Demand - Domestic cotton inventory in Xinjiang continues to decline, and transportation costs have decreased, leading to increased basis quotes from traders [1] - The demand from textile factories is weak, with a significant amount of cotton (estimated over 400,000 tons) yet to be priced, which may provide short-term support for cotton prices [1][2] - Weaker terminal demand has resulted in rising inventory levels for spinning enterprises, causing a decrease in their operating rates [2][4] Market Outlook - Institutions like Everbright Futures suggest that the likelihood of cotton prices maintaining a strong performance is low due to weak demand and sufficient inventory levels across the supply chain [3][4] - The market is currently facing pressure from a strong resistance level around 13,620 yuan/ton, which has been tested multiple times [3] - The overall market sentiment remains cautious, with potential risks accumulating due to declining spinning rates and rumors of increased import cotton quotas [5]