Report Industry Investment Rating No relevant content provided. Core Viewpoints of the Report - The cotton market currently has a mix of bullish and bearish factors. New cotton will be in large supply, which exerts pressure on cotton prices. Although it has entered the traditional consumption peak season, downstream demand remains weak. On the other hand, the industrial chain inventory has dropped to a low level, and the domestic commercial cotton inventory is at a historical low, with seasonal restocking providing support at the bottom. The short - term market is expected to fluctuate, with the range between 13,800 - 14,300 yuan/ton. It is advisable to wait and see for single - side trading and buy far - month contracts after the market drops to an appropriate level. Also, pay attention to the 11 - 1 reverse spread opportunity [5]. Summary by Relevant Catalogs 01 Weekly Core Points and Strategies - **Supply**: USDA reduced the US cotton planting area by 8% to 9.3 million acres in August, and the harvested area by 15% to 7.4 million acres. The final US cotton production was reduced by 302,000 tons to 2.877 million tons compared to last month, with a neutral - to - bullish impact. China's new - season cotton production is at a historical low but was increased by 108,000 tons to 6.858 million tons, and there is still room for further increase [5]. - **Demand**: Domestic downstream consumption is sluggish. In the off - season, textile mills have weak inventory - building intentions. According to Steel Union data, the operating rate of textile mills increased slightly to 66.5% this week from 66% last week, and the weekly operating rate of weaving mills also increased slightly to 38% from 37.4% last week. The profit loss of spinning mills continued to narrow, with a profit of - 1,187 yuan/ton this week compared to - 1,352 yuan/ton last week [5]. - **Inventory**: BCO announced that the social cotton inventory at the end of July was 2.1898 million tons, a decrease of 640,000 tons from the end of June and a 21% year - on - year decline. The domestic commercial cotton inventory is at a historical low. According to Steel Union data, the national commercial inventory was 1.547 million tons this week. The raw material inventory of textile mills was 27.44 days this week compared to 27.5 days last week, and the yarn inventory of textile mills was 30.6 days this week compared to 31 days last week [5]. - **Warehouse Receipts**: As of September 12, the registered warehouse receipts of Zhengzhou cotton were 5,017, with 0 valid forecasts. The total of warehouse receipts and valid forecasts was 200,600 tons, compared to 233,100 tons on September 5 [5]. - **Basis**: According to Wind data, as of September 12, the spot price of Xinjiang cotton was 15,200 yuan/ton, and the closing price of the main CF2601 contract was 13,860 yuan/ton. According to Mysteel data, as of September 11, the arrival price of US cotton M1 - 1/8 was lowered to 16,940 yuan/ton. The price of domestic 3128B lint cotton fluctuated and adjusted, with a quotation of 15,220 yuan/ton. The price difference between domestic and foreign cotton shrank to 1,720 yuan/ton [5]. - **Cost**: The overall average cost of ginning mills this year, converted to the official standard, is 14,700 - 14,800 yuan/ton. In the new season, with some ginning capacity in northern Xinjiang exiting and the overall demand outlook not optimistic, the opening purchase price is not expected to be high. According to market feedback this week, the purchase of hand - picked cotton has started in southern Xinjiang, and the price of seed cotton has risen rapidly from the initial 7.3 - 7.4 yuan/kg to 7.6 - 7.7 yuan/kg [5]. - **Macro**: The market is considering whether China will introduce more stimulus policies in the fourth quarter. The US employment market is weak. The non - farm employment number was revised down by 911,000 from March last year, an average monthly reduction of nearly 76,000. The number of initial jobless claims in the US last week increased to 263,000, the highest in nearly four years. The overall CPI monthly rate is 0.382%, and the core CPI monthly rate is 0.346%. The market has priced in three interest rate cuts by the Fed this year [5]. - **Strategy**: Pay attention to the 11 - 1 reverse spread opportunity. The short - term market is expected to fluctuate, with a reference range of 13,800 - 14,300 yuan/ton. It is advisable to wait and see for single - side trading and buy far - month contracts after the market drops to an appropriate level [5]. 02 Weekly Data Charts - **Global Supply - Demand Balance Sheet**: From 2020/21 to 2025/26 (August), the initial inventory, production, import, total supply, export, consumption, total consumption, and ending inventory all show different trends. The inventory - to - consumption ratio decreased from 58.54% to 62.65% [9]. - **Production by Major Producing Countries**: The production of major cotton - producing countries such as China, the US, and India shows different trends from 2020/21 to 2025/26. In 2025/26, China's production is 6.858 million tons, the US is 2.877 million tons, and India is 5.117 million tons [10]. - **Demand Changes in Major Producing Countries**: The consumption of major cotton - consuming countries such as China, India, and Pakistan also shows different trends from 2020/21 to 2025/26. In 2025/26, China's consumption is 8.165 million tons, India is 5.443 million tons, and Pakistan is 2.373 million tons [11]. - **US Inventory Cycle**: The US overall inventory cycle is transitioning from passive destocking to active restocking. The inventory of US clothing wholesalers and retailers is transitioning from three - year destocking to moderate active restocking. However, due to the Geneva Economic and Trade Talks Joint Statement and tariff relief, the continuous restocking behavior has been weakened to some extent [17]. - **Domestic New - Season Situation**: The new - season planting area and production are expected to maintain a supply - abundant pattern. The national area and production, as well as Xinjiang's area and production, show different trends in the surveys from February to June [21][22]. - **Inventory and Operating Rates**: China's commercial cotton inventory is being depleted rapidly. The operating rates of textile and weaving mills show slight increases, and the inventory of textile and weaving mills also shows certain changes [42].