Report Overview - Report Title: 20251031 Cotton Monthly Report: Pay Attention to the Opportunity of First Decline and Then Rise During the Pressure Transmission Period [1] - Report Date: October 31, 2025 [2] - Research Team: Agricultural Products Team [2] Industry Investment Rating - The overall investment rating for the cotton industry is neutral [3]. Core Viewpoints - Internationally, the increasing supply of cotton from the US and other countries in the Southern Hemisphere is putting pressure on the market. Although Brazil is accelerating its exports, the continuous implementation of India's MSP provides some support for international cotton prices. The ICE market is expected to fluctuate weakly, with a reference range of [63, 67] [3]. - Domestically, new cotton is expected to be harvested in about a week. After a slight increase in imports, the commercial inventory has recovered to the same level as the previous period, and the pressure on spot circulation is gradually increasing. The price of seed cotton has stabilized and rebounded recently, raising the average cost of new-season machine-picked lint cotton. On the demand side, the volume and price of downstream demand are still weakening, the enterprise load is seasonally weakening, and enterprises maintain just-in-time replenishment under the condition of few industrial orders. Pay attention to the sales speed and price during the pressure transmission process of inland warehouses to measure the profitability of inland buyers and the relief of the hedging density of all new cotton. During this period, the futures market may show a "first decline and then rise" trend. In terms of strategy, there is some support due to a slight increase in hedging pressure, but there is significant resistance to upward movement under the weak industrial driving force. Pay attention to the opportunity of high selling and low buying in the range of [13300, 13800] [3]. Summary by Directory Macro Factors - **International Macro**: The results of the China-US economic and trade consultations in Kuala Lumpur were announced. The US will cancel the 10% so-called "fentanyl tariff" on Chinese goods, and the 24% counter - tariff on Chinese goods will continue to be suspended for one year. The US will also suspend the implementation of the 50% penetrative export control rule and the 301 investigation measures against China's maritime, logistics, and shipbuilding industries for one year. The Federal Reserve cut the federal funds rate target range by 25 basis points to between 3.75% and 4.00%. The European Central Bank kept the benchmark interest rate unchanged at 2% for the third consecutive time, believing that inflation has reached the 2% target level [3]. - **Domestic Macro**: Not mentioned in the provided content. Supply - **International Supply**: New cotton is being harvested. As of now, 530,000 tons of new cotton have been inspected. In November, precipitation in major cotton - growing areas in the US will decrease, which is conducive to harvesting. In India, the MSP is gradually being implemented in the northern and central cotton - growing areas, but due to heavy precipitation, the MSP - based procurement has started slowly, and the daily listing volume of new cotton is about 12,000 tons. As of mid - October, the listing volume of new cotton in Pakistan was 588,000 tons, a year - on - year increase of 22% [3]. - **Domestic Supply**: - The national new cotton picking is approaching the end, with a progress of 79.7%, and it is expected to reach about 90% next week. The delivery progress is 88.5%, 4.3% faster than the same period last year; the inspection volume of new cotton has reached 1.68 million tons; the sales progress is 10.5%, 5.8% faster than the same period last year. The average purchase price of national seed cotton has stabilized and rebounded, rising from 6.16 yuan/kg in the middle of the month to 6.32 yuan/kg. The average price of new - season machine - picked lint cotton has increased to around 14,500 yuan/ton, and the cost range of machine - picked lint cotton during the harvest period is 14,000 - 15,000 yuan/ton [10]. - This week, the national commercial cotton inventory increased by 408,200 tons to 1.8416 million tons, 76,600 tons lower than the same period last year; the commercial inventory in Xinjiang increased by 297,400 tons to 944,400 tons, 16,600 tons higher than the same period last year; the commercial inventory in major inland provinces decreased by 27,500 tons to 170,200 tons, 58,200 tons lower than the same period last year. In terms of finished products, the inventory days of pure cotton yarn decreased by 0.23 days to 31.02 days, the inventory days of terminal grey cloth decreased by 1.07 days to 23.01 days, and the inventory days of polyester - cotton yarn in the factory decreased by 0.15 days to 27.81 days [12]. - In September 2025, China imported about 100,000 tons of cotton, a year - on - year decrease of about 18.7%; from January to September 2025, China imported about 680,000 tons of cotton, a year - on - year decrease of about 69.8%. In September 2025, China imported about 127,700 tons of cotton yarn, a month - on - month decrease of 3.21% and a year - on - year increase of 15.02%. From January to September, the total import volume of cotton yarn in China was about 1.0366 million tons, a year - on - year decrease of 7.44% [16]. - There are few cotton warehouse receipts left in Xinjiang, and the effective forecast volume far exceeds that of the same period last year [17]. Inventory - The national cotton commercial inventory continues to rise, basically converging the previous year - on - year difference and approaching the same - period level. The inventory in Xinjiang has exceeded the same - period level, while the change in inland inventory is not obvious. Attention should be paid to the pressure of passive inventory replenishment in inland areas. The inventory of downstream finished products has decreased slightly, and the overall inventory level is still relatively neutral. Most of the Xinjiang warehouse receipts have flowed out, and the remaining warehouse receipts are concentrated in inland cotton - growing areas. The forecast volume of new - cotton warehouse receipts in Xinjiang exceeds that of the same period [3]. Demand - **International Demand**: In the US, clothing retail and wholesale sales continued to grow strongly in August, but consumer confidence declined slightly in September. In September, Vietnam's textile and clothing exports decreased seasonally but were still higher year - on - year. The consumer confidence index in the EU showed signs of stabilizing and recovering in September. In August, the growth rate of clothing import volume decreased significantly, and the import amount decreased, showing an increase in volume and a decrease in price [3]. - **Domestic Demand**: - This week, the operating rates of spinning mills and weaving mills decreased slightly. Due to the recent increase in cotton prices and the difficulty of downstream yarn price support, the immediate profits of representative yarns have declined to varying degrees. The cumulative difference in the overall industry profit has been expanding this year. As of September, the cumulative year - on - year profit has rebounded to - 18.5% [20]. - This week, the total cotton cloth sales volume in the Light Textile City increased slightly, and the 5 - day moving average of cotton cloth sales volume increased from 386,000 meters to 390,000 meters, 74,000 meters higher than the same period. In Keqiao, the fabric price index decreased by 0.16 to 110.79, and the auxiliary material price index decreased by 1.45 to 110.98 [22]. - In September, the PMI of the cotton textile industry increased by 1.57% to 44.29%, 12.29% lower than the same period and below the boom - bust line for five consecutive months. In terms of demand, the new order PMI increased by 1.98% to 48.72%, 9.44% lower than the same period; the operating rate PMI increased by 4.07% to 41.03%, 17.13% lower than the same period. In terms of inventory, the cotton yarn inventory PMI increased by 7.5% to 56.41%, 3.79% higher than the same period; the cotton inventory increased by 1.75% to 41.3%, 3.79% higher than the same period [24]. - In September, the total retail sales of enterprises above the designated size in clothing, footwear, hats, and knitted textiles reached 123.1 billion yuan, a year - on - year increase of 4.7%, further increasing from the 3.1% year - on - year growth rate in August; from January to September, the cumulative total retail sales of enterprises above the designated size in clothing, footwear, hats, and knitted textiles were 1.0613 trillion yuan, a year - on - year increase of 3.1% [26]. - In September, the "rush - to - export" effect continued to decline, and the year - on - year performance further weakened. The export of textile and clothing continued to be under pressure, and the export unit prices of clothing and yarn showed a slight divergence, but the export situation was still serious both year - on - year and month - on - month [3].

Group 1: Market Information - The closing prices of CF01, CF05, and CF09 contracts were 13,535, 13,575, and 13,740 respectively, with the price of CF01 down 5, CF05 down 25, and CF09 down 30. The closing prices of CY01, CY05, and CY09 contracts were 19,760, 19,745, and 20,085 respectively, with the price of CY01 down 15, CY05 down 50, and CY09 unchanged [3]. - The CCIndex3128B spot price was 14,728 yuan/ton, up 49; the CY IndexC32S was 20,470 yuan/ton, up 30. The Cot A price was 75.65 cents/pound, and the FCY IndexC33S was 21,213 yuan/ton, up 13 [3]. - The 1 - 5 - month cotton spread was -40, up 20; the 5 - 9 - month spread was -165, up 5; the 9 - 1 - month spread was 205, down 25. The 1 - 5 - month棉纱 spread was 15, up 35; the 5 - 9 - month spread was -340, down 20,135; the 9 - 1 - month spread was 325, up 20,100 [3]. - The CY01 - CF01 spread was 6,225, down 10; the CY05 - CF05 spread was 6,170, down 25; the CY09 - CF09 spread was 6,345, up 20,115. The 1% tariff - based internal and external cotton spread was 1,317, down 218; the sliding - duty internal and external cotton spread was 493, down 120; the internal and external yarn spread was -743, up 17 [3]. Group 2: Market News and Views Cotton Market - As of October 15, the textile enterprises' in - stock cotton industrial inventory was 809,300 tons, a decrease of 36,200 tons from the end of last month. The available cotton inventory was 971,200 tons, a decrease of 61,100 tons from the end of last month. The yarn inventory of textile enterprises was 25.24 days, an increase of 0.39 days from the end of last month, and the grey fabric inventory was 31.43 days, an increase of 0.31 days from the end of last month [6]. - Since the new cotton acquisition started on September 26, 24 cotton acquisition and processing enterprises in Hutubi County had acquired 242,000 tons of seed cotton as of October 10, and the acquisition was expected to be completed by early December. As of mid - October, 35 cotton processing enterprises in Shaya County had acquired 215,000 tons of seed cotton, achieving the expected acquisition volume, with an average daily acquisition volume of over 20,000 tons [6]. - During the holiday, as new flowers entered the acquisition period, the market focus shifted to the opening price of new cotton. This year, the Xinjiang cotton output was high and the enthusiasm of ginning factories for acquisition was average, with no large - scale rush for acquisition. The acquisition price in some markets was around 6 yuan/kg. With the large - scale listing of new flowers, it was expected that there would be certain selling and hedging pressure on the futures market. The peak season performance of the demand side was average. Although the downstream demand had slightly improved, the improvement range was relatively limited, so the peak season performance this year was not expected to be very prominent, and the peak season demand was expected to have a relatively limited boosting effect on the market [7]. - The trading strategies were as follows: for unilateral trading, it was expected that the future trend of US cotton would mostly be volatile, and Zhengzhou cotton was also expected to show a volatile trend; for arbitrage and options, it was recommended to wait and see [8]. Cotton Yarn Industry - Last night, Zhengzhou cotton fluctuated steadily, the hedging pressure gradually emerged, and the cotton spot price was stable with a slight increase. However, due to the expectation of a bumper new cotton harvest, most spinning mills remained on the sidelines, mainly replenishing raw materials on a just - in - time basis. The trading volume in the pure cotton yarn market slightly recovered, with small orders selling well, but traders were still cautious in purchasing. Affected by Zhengzhou cotton, some manufacturers continued to adjust their quotes, and the pure cotton yarn price slightly recovered. However, due to the poor orders of weaving factories, the actual transaction price did not change much. There was little change in inventory, and the inventory of some spinning mills in the inland slightly increased. It was necessary to continue to pay attention to the trend of Zhengzhou cotton and downstream demand. In addition, factors such as the China - US presidential meeting and the Fed's possible interest rate cut at the end of the month might also have an impact on external demand [8]. - The current ex - works price of Xinjiang - produced combed compact siro - spun R/JC 50/50 50S was around 25,000 yuan/ton, and the ex - works price of high - grade ring - spun C32S was 21,200 - 21,300 yuan/ton. Real - order negotiations were available [10]. - Cotton weaving factories generally reported that the recent market was significantly worse than in September. Currently, they were in the inventory accumulation stage, and there were discounts on the actual transaction price of grey fabrics. The in - production orders were mainly for medium - and thick - type fabrics, but the profit was poor, and there were few sampling orders for thin - type fabrics. Since the new downstream orders were mainly small and urgent orders, and large orders were hard to find, weaving factories mainly purchased on a just - in - time basis [10]. Group 3: Options - On October 21, 2025, the closing price of CF601C13400.CZC was 247, up 32.1%; the closing price of CF601P13000.CZC was 45, down 29.7%; the closing price of CF601P12400.CZC was 15, down 42.3%. The 120 - day HV of cotton yesterday was 8.542, with the volatility slightly decreasing compared to the previous day. The implied volatility of CF601 - C - 13400 was 9.3%, the implied volatility of CF601 - P - 13000 was 10.9%, and the implied volatility of CF601 - P - 12400 was 13.9% [12]. - Yesterday, the PCR of the main contract of Zhengzhou cotton was 0.7255, and the volume PCR of the main contract was 0.6021. Today, the trading volume of both call and put options increased. The option trading strategy was to wait and see [13][14].

Report Information - Report Title: Cotton Industry Risk Management Daily Report - Date: October 15, 2025 - Analyst: Chen Jianing (Investment Consulting License No.: Z0020097) - Investment Consulting Business Qualification: CSRC License [2011] No. 1290 [1][2] Industry Investment Rating - Not provided Core Viewpoints - As of October 14, 2025, a total of 488,900 tons of cotton have been notarized and inspected in the 24/25 season. The cotton picking progress in Xinjiang has passed the halfway point, with northern Xinjiang in the later stage and the machine - picking progress in Kashgar and Kizilsu in southern Xinjiang slightly slower. The current purchase price of machine - picked cotton in Xinjiang is mostly between 6.05 - 6.3 yuan/kg, with southern Xinjiang slightly higher. The production increase expectation has been slightly revised, but the downstream peak season is gradually weakening, market confidence is insufficient, and the supply pressure of new cotton will gradually emerge. Under the high - yield pattern, cotton prices face significant hedging pressure. Also, Sino - US tariff policy disturbances have resurfaced. The strategy is still to sell on rebounds [4]. Summary by Directory Cotton Price Forecast - The monthly price range forecast for cotton is 13,000 - 13,600, with a current 20 - day rolling volatility of 0.0703 and a current volatility historical percentile (3 - year) of 0.1146 [3] Risk Management Strategies Inventory Management - For enterprises with high inventory worried about cotton price drops, they can short Zhengzhou cotton futures (CF2601) to lock in profits and cover production costs, with a selling ratio of 50% and a recommended entry range of 13,500 - 13,600. They can also sell call options (CF601C13600) to collect premiums and reduce costs, with a selling ratio of 75% and a recommended entry range of 200 - 250 [3] Procurement Management - For enterprises with low procurement inventory hoping to purchase according to orders, they can buy Zhengzhou cotton futures (CF2601) to lock in procurement costs in advance, with a buying ratio of 50% and a recommended entry range of 13,000 - 13,100. They can also sell put options (CF601P13000) to collect premiums and reduce procurement costs, with a selling ratio of 50% and a recommended entry range of 200 - 250 [3] Market Factors Bullish Factors - Some producing areas in southern Xinjiang reported lower - than - expected yields per unit, and the lint percentage of new cotton is low, so the high - yield level may be revised compared to the previous expectation. Also, yarn mills have low raw material inventories and have a rigid demand for replenishing cotton stocks [6] Bearish Factors - The US announced that it will impose an additional 100% tariff on all Chinese goods exported to the US starting from November 1. The new - season cotton output has increased year - on - year, and there is significant hedging pressure above the cotton price. In September 2025, China's textile and clothing exports were 24.42 billion US dollars, a year - on - year decrease of 1.42% and a month - on - month decrease of 7.99%. Among them, textile exports were 11.967 billion US dollars, a year - on - year increase of 6.43% and a month - on - month decrease of 3.44%; clothing exports were 12.453 billion US dollars, a year - on - year decrease of 7.95% and a month - on - month decrease of 11.97% [5][6] Futures and Price Index Data Cotton and Cotton Yarn Futures Prices - Cotton 01 closed at 13,270, up 5 with a 0.04% increase; Cotton 05 closed at 13,330, up 10 with a 0.08% increase; Cotton 09 closed at 13,505, up 5 with a 0.04% increase; Cotton yarn 01 closed at 19,325, up 35 with a 0.18% increase; Cotton yarn 05 and 09 had a closing price of 0, down 100% [7] Cotton and Cotton Yarn Spreads - Cotton basis was 1,404, down 86; Cotton 01 - 05 spread was - 60, down 5; Cotton 05 - 09 spread was - 175, up 5; Cotton 09 - 01 spread was 235, unchanged; The cotton - yarn spread was 6,040, down 15; The domestic - foreign cotton spread was 1,939, down 17; The domestic - foreign yarn spread was - 670, unchanged [8] Domestic and Foreign Cotton Price Indexes - CCI 3128B was 14,674, down 81 with a - 0.55% decrease; CCI 2227B was 12,844, down 66 with a - 0.51% decrease; CCI 2129B was 14,960, down 67 with a - 0.45% decrease; FCI Index S was 13,044, down 8 with a - 0.06% decrease; FCI Index M was 12,808, down 8 with a - 0.06% decrease; FCI Index L was 12,487, down 7 with a - 0.06% decrease [9]

Report Overview - **Title**: Nanhua Futures' Outlook for Cotton in the Fourth Quarter [1] - **Author**: Chen Jianing [2] - **Investment Advisory License Number**: Z0020097 [2] - **Investment Advisory Business Qualification**: CSRC License [2011] No. 1290 [2] 1. Investment Rating - The report does not provide an industry investment rating. 2. Core Views - In the third quarter, Zhengzhou cotton (Zhengmian) showed a volatile pattern. Domestic cotton consumption was better than expected, with strong domestic demand and "rush - export" orders for external demand. Xinjiang cotton destocking accelerated, supporting cotton prices. However, the expected high - yield of new cotton and poor downstream profits limited price increases. US cotton was in a tug - of - war between slow export sign - ups and a decline in production expectations, with high unpriced contracts, maintaining a narrow - range consolidation. [2] - In the fourth quarter, the listing of new domestic cotton will ease the supply shortage. Ginners may be cautious in purchasing, and the high - yield pattern of Xinjiang cotton will bring significant hedging pressure. Domestic demand may maintain moderate growth, but external sales may not sustain previous strong performance after the "rush - export" orders. Cotton prices lack upward drivers. [2] - The predicted price range for Zhengmian is 13,000 - 14,500 yuan/ton. The recommended strategy is to short on price rebounds and pay attention to the 1 - 5 reverse spread opportunity. [2] 3. Summary by Directory 3.1. Market Review - **Zhengzhou Cotton**: In the third quarter, Zhengmian fluctuated in the range of 13,500 - 14,400 yuan/ton. After being impacted by tariff policies in the first half of the year, it gradually recovered as tariff policy implementation was postponed. With better - than - expected consumption and reduced imports, Xinjiang cotton destocking accelerated, and inventory was low at the end of the year. However, the expected high - yield of new cotton and poor spinning profits limited price increases. [2] - **US Cotton**: US cotton fluctuated in the range of 65 - 70 cents/pound. Slow export progress at the beginning of the year was followed by price declines due to tariff policies. After reaching the export sign - up target, prices recovered. High unpriced contracts in the third quarter suppressed prices, and it oscillated narrowly between slow export sign - ups and expected production decline. [7] 3.2. Core Concerns 3.2.1. Import Quotas and Cotton Destocking - From January to August 2025, China's cumulative cotton imports were 590,000 tons, a significant year - on - year decrease of 2.05 million tons, and cumulative棉纱 imports were 910,000 tons, a year - on - year decrease of 610,000 tons. Monthly cotton imports in the third quarter were at a near - decade low. [9] - On August 25, the National Development and Reform Commission issued an additional 200,000 - ton cotton import sliding - duty processing trade quota, which had limited impact on market sentiment. With favorable import profits, cotton imports may slightly increase in the fourth quarter, and the price gap between domestic and foreign cotton may narrow slightly. [9] - Due to reduced imports and increased downstream demand in Xinjiang, domestic cotton destocking accelerated. As of the end of August, China's cotton industrial and commercial inventory was only 2.374 million tons, a year - on - year decrease of 622,000 tons. After the listing of new cotton in the fourth quarter, the inventory shortage can be alleviated, but imports may remain low, and domestic cotton supply and demand may still be tight at the end of the year. [14] 3.2.2. New - Season High - Yield and Hedging Pressure - In the new season, with the support of the cotton target price subsidy policy, farmers' enthusiasm for cotton planting remained high, and the planting area in Xinjiang increased. The expected cotton output in Xinjiang for the 25/26 season is 7.108 million tons, a year - on - year increase of 8.1%. [16] - The concentrated listing of new cotton is postponed to the National Day holiday. Currently, the purchase price of machine - picked seed cotton is stable with a slight decline. Ginners may be cautious in purchasing, and cotton prices may face significant hedging pressure in the fourth quarter. [17] 3.2.3. Domestic and Foreign Sales - **Domestic Sales**: From January to August 2025, China's retail sales of clothing, footwear, and textiles reached 940.04 billion yuan, a year - on - year increase of 3.91%. Downstream demand is in the peak season, but with expanded spinning capacity, orders decreased, and spinning profits were limited. Domestic textile and apparel sales may maintain moderate growth in the fourth quarter. [19] - **Foreign Sales**: From January to August 2025, China's total textile and clothing exports were 197.275 billion US dollars, basically the same as the previous year. Cotton product exports showed a "quantity - for - price" trend, and export profits were squeezed under US tariff pressure. Although exports to emerging markets increased, the bright performance of the export market may not be sustainable in the short term without improved US - China tariff policies. [21] 3.2.4. US New - Season Production and Export - In the 25/26 season, due to a low cotton - grain price ratio, US cotton planting area decreased. The USDA expects the new - season planting area to be 56.427 million mu, a year - on - year decrease of 16.9%. Although the weather in cotton - growing areas improved, the expected output is 2.879 million tons, a year - on - year decrease of 259,000 tons. [25] - As of September 11, US cotton export sign - ups were slow. However, tariff negotiation policies may help stabilize US agricultural product exports, and the subsequent adjustment of US foreign tariff policies needs attention. [30] 3.2.5. Global Production and Consumption - According to the USDA's September report, the expected global cotton output in the 25/26 season is 25.622 million tons, a year - on - year decrease of 335,000 tons. China and Brazil are expected to increase production, while the US, Australia, and Turkey will see output declines. [34] - Global cotton consumption is expected to reach 25.872 million tons, a year - on - year decrease of 70,000 tons. China's consumption is expected to decline slightly, and Southeast Asian countries' consumption will be basically the same as the previous year. [35] 3.3. Valuation Feedback and Supply - Demand Outlook - In the fourth quarter, with the listing of new cotton in the Northern Hemisphere, the pressure of high - yield in China will become apparent. Ginners may be cautious in purchasing, and cotton prices may face hedging pressure and have a phased decline. [37] - In the long - term, if China's high - yield situation continues and the US - China situation remains unchanged, the quota for cotton imports may remain low. With the support of Xinjiang's spinning capacity and high operating rates, domestic cotton destocking may be fast, and Zhengmian may rebound after reaching the bottom. [37]