Group 1 - Cotton futures are experiencing low volatility, with the main contract reported at 13,980.00 CNY/ton, reflecting a decline of 1.96% [1] - As of the end of July, China's cotton commercial inventory stands at 2.19 million tons, a year-on-year decrease of 588,000 tons and a month-on-month decrease of 640,000 tons, indicating a low level compared to recent years [2] - The average price of 3128 cotton arriving at factories was 15,590 CNY/ton, an increase of 170.00 CNY/ton, while the price of 32s pure cotton yarn remained stable at 21,555 CNY/ton [2] Group 2 - From a fundamental perspective, the speed of cotton inventory reduction and the operating rates of yarn and weaving factories have not shown significant improvement, indicating weak terminal demand [3] - The domestic cotton market is facing tight supply, with the cash basis remaining strong despite recent increases in sliding tax quota issuance, while the textile market is still in the off-season with insufficient new orders [3] - Short-term expectations for Zheng cotton indicate a potential slight decline next week, with a focus on the range of 14,000 to 14,500 CNY/ton [3]

Report Investment Rating - The report does not provide an investment rating for the cotton and cotton yarn industry. Core Viewpoints - New cotton is entering the concentrated boll - opening stage in Xinjiang, with the expected picking time earlier than last year. Attention should be paid to rainfall in September. Continuous rainy days may affect cotton quality and harvest progress. Currently, the weather forecast shows a possible temperature drop in early September in Xinjiang and precipitation in northern Xinjiang in the first ten - day period, which may be unfavorable for boll - opening. [5] - The National Development and Reform Commission issued an additional 200,000 - ton tariff - rate quota for cotton imports under processing trade to supplement market supply before new cotton is on the market, which is in line with market expectations. The quota is issued based on import contracts, and the quota certificate is valid for 2 months after issuance, having a limited impact on the market. Domestic inventory remains tight before new cotton arrives. [5] - With the arrival of the "Golden September and Silver October" season, downstream finished - product inventories are further reduced, but profits have not significantly recovered. Downstream confidence is insufficient, and orders are still lacking. [5] - From August 27, the US will impose an additional 25% tariff on India. In response, India has extended the exemption of cotton import tariffs from September 30 to December 31. From January to June this year, the US imported about 276,400 tons of cotton products from India, accounting for about 19% of its total imports. Under the significant tariff increase, India's exports may face challenges, and future orders may shift. [5] - The low - inventory situation before new cotton is on the market still supports cotton prices. The strategy is to go long on dips, and attention should be paid to the peak sales season of downstream products and the time when new cotton comes onto the market. [6] Summary of Different Regions Domestic Market Supply - As of August 21, the national new cotton sales rate was 98.1%, 5.3 percentage points higher than the same period last year and 7.9 percentage points higher than the average of the past four years. [1] Import - In July, China's cotton import volume was 50,000 tons, a month - on - month increase of 20,000 tons and a year - on - year decrease of 150,000 tons. The cotton yarn import volume was 110,000 tons, unchanged from the previous month and a year - on - year decrease of 20,000 tons. The cotton cloth import volume was 3,981.43 tons, a month - on - month increase of 29.16% and a year - on - year decrease of 10.57%. [1] Demand - In July, domestic retail sales of textiles and clothing were 96.1 billion yuan, a month - on - month decrease of 24.63% and a year - on - year increase of 1.80%. The export value of textiles and clothing in July was 26.766 billion US dollars, a month - on - month decrease of 2.01% and a year - on - year decrease of 0.06%. [1] Inventory - As of August 15, the total industrial and commercial cotton inventory in China was 2.7444 million tons, a decrease of 343,800 tons from the end of July. Among them, commercial inventory was 1.8202 million tons, a decrease of 369,600 tons from the end of July, and industrial inventory was 924,200 tons, an increase of 25,800 tons from the end of July. [1] International Market US Market - **Supply**: As of August 24, the boll - setting rate of cotton in the US was 81%, 7 percentage points behind the same period last year and 6 percentage points behind the five - year average. The boll - opening rate was 20%, 4 percentage points behind the same period last year and 2 percentage points behind the five - year average. The overall good - quality rate of cotton plants was 54%, a 1 - percentage - point decrease from the previous month and a 14 - percentage - point increase from the same period last year. [2] - **Demand**: From August 15 - 21, the net signing volume of US 2025/2026 - season upland cotton was 40,665 tons, a significant month - on - month increase of 70%. The shipment volume of upland cotton was 25,560 tons, a month - on - month decrease of 9%. The net signing volume of Pima cotton was 885 tons, and the shipment volume of Pima cotton was 3,175 tons. There were no signings for the 2026/2027 - season upland cotton and Pima cotton this week. [2] Southeast Asian Market - **Supply**: As of August 25, the sown area of new - season cotton in India reached 10.85 million hectares, a year - on - year decrease of about 2.6%. [2] - **Demand**: In July, Vietnam's textile and clothing export value was 3.911 billion US dollars, a month - on - month increase of 8.7% and a year - on - year increase of 5.3%. In June, Bangladesh's clothing export value was 2.788 billion US dollars, a month - on - month decrease of 28.87% and a year - on - year decrease of 6.31%. In July, India's clothing export value was 1.34 billion US dollars, a month - on - month increase of 2.2% and a year - on - year increase of 4.8%. In June, Pakistan's textile and clothing export value was 1.522 billion US dollars, a month - on - month decrease of 0.60% and a year - on - year increase of 7.59%. [2] Futures Market - **Futures Price Changes**: The closing price of Zhengzhou Cotton 01 was 14,240 yuan, with a weekly increase of 210 yuan and a rise rate of 1.5%. The closing price of Zhengzhou Cotton 05 was 14,200 yuan, with a weekly increase of 210 yuan and a rise rate of 1.5%. The closing price of Zhengzhou Cotton 09 was 13,790 yuan, with a weekly increase of 30 yuan and a rise rate of 0.22%. [19][23] - **Spot Price Changes**: The price of CC Index 3128B was 15,328 yuan, with an increase of 85 yuan and a rise rate of 0.56%. The price of CC Index 2227B was 13,412 yuan, with an increase of 71 yuan and a rise rate of 0.53%. The price of CC Index 2129B was 15,603 yuan, with an increase of 75 yuan and a rise rate of 0.48%. [23] - **Spread Changes**: The CF1 - 5 spread was 40 yuan, with no change. The CF5 - 9 spread was 410 yuan, an increase of 180 yuan. The CF9 - 1 spread was - 450 yuan, a decrease of 180 yuan. [23] - **Import Price Changes**: The price of FC Index M was 13,492 yuan, a decrease of 14 yuan and a decline rate of 0.1%. The price of FCY Index C32s was 21,245 yuan, an increase of 13 yuan and a rise rate of 0.06%. [23] - **Cotton Yarn Price Changes**: The closing price of cotton yarn futures was 20,140 yuan, with a weekly increase of 80 yuan and a rise rate of 0.4%. The spot price of cotton yarn was 20,780 yuan, with an increase of 60 yuan and a rise rate of 0.29%. [23]

Core Viewpoint - Cotton futures prices continued to fluctuate, with the main contract closing at 13,880 yuan/ton, an increase of 80 yuan/ton or 0.58% from the previous trading day [1] Fundamental Summary - From August 9-11, the basis for spot Australian cotton LM1-5/32 (strength 29-30 GPT) was approximately 3.5-4.5 cents/pound, while LM1-3/16 (strength 30 GPT) had a basis of 6-6.75 cents/pound. The basis for bonded Australian cotton M1-5/32 (strength 28/29) at major ports in China was generally around 13.5-15 cents/pound [2] - In the first week of August, Brazil exported 17,242.63 tons of cotton, with an average daily export volume of 2,873.77 tons, a decrease of 43% compared to the average daily export volume for the entire month of August 2024. The total export volume for August 2024 was 111,764.74 tons, with the decline attributed to reduced market demand and price competition [2] - As of the week ending August 8, the spinning mill operating rate was 65.7%, down 0.9 percentage points week-on-week and down 3.4 percentage points year-on-year. The weaving mill operating rate was 37%, down 0.1 percentage points week-on-week and down 1.9 percentage points year-on-year. Weekly commercial cotton inventory was 2.01 million tons, a decrease of 150,000 tons week-on-week and flat year-on-year [2] Institutional Perspectives - Zhongyuan Futures noted that the new cotton growth is generally normal, with recent weather conditions having limited impact on cotton growth. The market has strong expectations for a bumper crop in 2025, which is suppressing the prices of distant contracts. Demand remains under pressure, with low operating rates in textile enterprises, high grey fabric inventory, insufficient export orders, and no significant improvement in domestic consumption. Although some textile companies expect a temporary recovery in late August, overall market confidence is lacking. The current cotton prices face pressure from above and support from below, with the market lacking core drivers and awaiting further news [3] - Shenwan Hongyuan Futures indicated that cotton prices are currently maintaining a range-bound trend. On the supply side, cotton supply is relatively tight, and the spot basis remains firm. Future attention is needed on whether additional sliding tax quota will be issued. On the demand side, there are marginal improvements in downstream industries, but overall confidence remains low. Macroeconomic factors suggest that short-term tariff impacts may weaken, and attention should be paid to policies against "involution" affecting bulk commodities. Overall, Zheng cotton may experience short-term fluctuations with potential upward movement, but the upper space is expected to be limited, and medium-term pressure is anticipated from the new cotton harvest [3]

Group 1: Report Industry Investment Rating - Not provided in the content Group 2: Core Viewpoints of the Report - In July, Zhengzhou cotton prices first rose and then fell. As of July 31, the main contract of Zhengzhou cotton 2509 closed at 13,650 yuan/ton, down 90 yuan/ton for the month, a decrease of 0.66%. The main contract of cotton yarn closed at 19,770 yuan/ton, down 220 yuan/ton for the month, a decrease of 1.10%. The main contract of US cotton closed at 67.22 cents/pound, down 0.82 cents/pound for the month, a decrease of 1.21% [4]. - The low - inventory logic of the 09 contract has ended, and the 01 contract faces the pressure of new cotton listing. After a rapid price correction, there is a short - term need for stabilization and adjustment. In terms of supply, the weather in Xinjiang this year is favorable for a bumper harvest, but recent high - temperature weather may have an adverse impact on the quality of new cotton. In terms of demand, the lack of progress in Sino - US negotiations has put pressure on US cotton prices, and the short - term import pressure is not large. The supply - demand tightness still exists. Coupled with the expansion of ginning factory capacity, there may be an expectation of抢购 if the price remains rigid. Therefore, cotton prices may be more likely to rise than fall from August to September. Overall, long positions can be opportunistically established near 13,200 - 13,600 for the 01 contract [4][22]. Group 3: Summary by Directory 1. Market Review - In July, Zhengzhou cotton prices first rose and then fell. As of July 31, the main contract of Zhengzhou cotton 2509 closed at 13,650 yuan/ton, down 90 yuan/ton for the month, a decrease of 0.66%. The main contract of cotton yarn closed at 19,770 yuan/ton, down 220 yuan/ton for the month, a decrease of 1.10%. The main contract of US cotton closed at 67.22 cents/pound, down 0.82 cents/pound for the month, a decrease of 1.21% [4][8]. 2. Fundamental Analysis (1) Weather impact is limited, and there is an expectation of a bumper cotton harvest - According to a survey in June by the International Cotton Market Monitoring System, the weather in major cotton - producing areas is favorable for cotton budding and boll - setting, with relatively few disasters. It is estimated that the new cotton yield per mu in 2025 will be 158.7 kg, a year - on - year increase of 2.5%. The national actual sown area of cotton in 2025 is 45.803 million mu, a year - on - year increase of 6.3% [16]. (2) Downstream consumption is stable, and attention should be paid to Sino - US negotiations - From January to June, the cumulative export value of clothing and clothing accessories in China was 73.466 billion US dollars, a year - on - year decrease of 0.66%. The cumulative export of textile yarns, fabrics and products from January to June was 70.531 billion US dollars, a year - on - year increase of 1.60%. From January to June, the cumulative retail sales of clothing in China was 534.13 billion yuan, a cumulative year - on - year increase of 3.59%. From January to June, the cumulative retail sales of clothing, shoes, hats, and textiles in China was 743.59 billion yuan, a cumulative year - on - year increase of 4.62%. As of August 12, the deadline for the postponement of Sino - US tariffs is approaching. Currently, Sino - US negotiations are centered around further delaying tariffs. It is expected that tariffs will most likely be postponed, but there is still a long way to go before a framework agreement is reached. If there is no progress, market sentiment will be bearish [17]. 3. Future Outlook - The low - inventory logic of the 09 contract has ended, and the 01 contract faces the pressure of new cotton listing. After a rapid price correction, there is a short - term need for stabilization and adjustment. In terms of supply, the weather in Xinjiang this year is favorable for a bumper harvest, but recent high - temperature weather may have an adverse impact on the quality of new cotton. In terms of demand, the lack of progress in Sino - US negotiations has put pressure on US cotton prices, and the short - term import pressure is not large. The supply - demand tightness still exists. Coupled with the expansion of ginning factory capacity, there may be an expectation of抢购 if the price remains rigid. Therefore, cotton prices may be more likely to rise than fall from August to September. Overall, long positions can be opportunistically established near 13,200 - 13,600 for the 01 contract [4][22].

Core Insights - The USDA report indicates that export sales are "quite poor," which may be the final straw for the rebound in cotton prices [1] Group 1 - The USDA report highlights a significant decline in cotton export sales, contributing to bearish sentiment in the market [1] - Analysts suggest that the disappointing export figures could hinder any potential recovery in cotton prices [1] - The report may lead to increased volatility in the cotton market as traders react to the negative outlook [1]

Core Viewpoint - Cotton futures prices have significantly increased due to improved macroeconomic sentiment and accelerated commercial inventory depletion, leading to expectations of tighter supply before the new cotton harvest [2][3]. Group 1: Cotton Price Trends - On June 9, cotton futures prices surged, with the main contract reaching a three-week high of 13,550 yuan/ton, closing at 13,495 yuan/ton, marking a daily increase of 1.09% [2]. - Since April 9, cotton futures prices have shown a cumulative increase of 6% after initially declining [2]. Group 2: Inventory and Demand Dynamics - As of the end of May, China's commercial cotton inventory stood at 3.459 million tons, a decrease of 694,000 tons from the end of April, with monthly reductions exceeding 600,000 tons since March [3]. - Retail sales in April for clothing, shoes, and textiles reached 108.8 billion yuan, reflecting a year-on-year growth of 2.2%, indicating strong domestic demand [3]. Group 3: Supply Factors - Domestic cotton production is expected to increase, with the planting area in Xinjiang projected to grow in 2025, supported by favorable climate conditions [4]. - In contrast, U.S. cotton planting area is expected to decrease by 12% in 2025, with the main cotton-producing state, Texas, seeing an 8% reduction [5]. Group 4: Global Cotton Market Outlook - The USDA forecasts a global cotton production increase of 1.76 million tons to 26.36 million tons for the 2024/25 season, while U.S. cotton production is expected to rise by 510,000 tons to 3.14 million tons [6]. - Recent U.S. cotton sales have been sluggish, with cumulative contracts down 6.8% year-on-year as of May 29 [6]. Group 5: Investment Opportunities - Analysts suggest that investors should monitor macroeconomic impacts, cotton supply and demand dynamics, and weather conditions, as these factors will significantly influence cotton prices [7]. - Short-term cotton futures prices are expected to fluctuate between 13,000 and 13,800 yuan/ton, with potential upward pressure from low inventory levels [8].