1. Report Industry Investment Rating - No information provided in the report 2. Core View of the Report - The fundamentals of cotton remain strong, with an upward trend in the long - term. It is recommended to build long positions on dips. The short - term trend of US cotton and Zhengzhou cotton is likely to be range - bound [5][6] 3. Summary by Directory 3.1 Market Information - **Futures Disk**: The closing prices of CF01, CF05, and CF09 contracts decreased by 70, CY01 remained unchanged, CY05 decreased by 45, and CY09 decreased by 25. The trading volume of most contracts decreased, and the open interest of some contracts changed. For example, the trading volume of CF05 decreased by 13,325, and the open interest decreased by 270 [2] - **Spot Price**: CCIndex3128B decreased by 45 to 15,967 yuan/ton, Cot A was 72.80 cents/pound, and the price of some other products remained stable or changed slightly [2] - **Price Difference**: The cotton inter - period spreads such as 1 - 5 months, 5 - 9 months, and 9 - 1 months had different values and changes, and the same for the yarn inter - period spreads. The cross - variety spreads and internal - external spreads also had corresponding values and changes [2] 3.2 Market News and Views - **Cotton Market News** - On February 11, 2026, the road transportation price index of Xinjiang cotton was 0.1402 yuan/ton·km, remaining flat. It is expected to be relatively stable in the short term [4] - As of January 31, 2026, the CAI's assessment of India's 2025/26 cotton balance sheet was the same as last month. Compared with the previous year, the beginning inventory increased by 360,000 tons, production increased by 80,000 tons, imports increased by 150,000 tons, domestic demand decreased by 150,000 tons, exports decreased by 50,000 tons, and the ending inventory increased by 800,000 tons [4] - According to the latest February production and sales forecast of USDA, the total supply increased by 90,000 tons to 2.609 million tons, the total demand decreased by 44,000 tons to 2.5847 million tons, and the ending inventory increased by 140,000 tons to 1.635 million tons [4] - **Trading Logic**: There are news that the cotton planting area in Xinjiang will decrease by 2660000 mu to 36.21 million mu in 2026, a decrease of 7%. The implementation of the reduction plan is expected to be strong. At the same time, several large textile projects are expected to be launched in Xinjiang, which is beneficial to cotton consumption [5] - **Trading Strategy** - Unilateral: It is expected that the short - term trend of US cotton and Zhengzhou cotton will be range - bound. It is advisable to build long positions on dips [6] - Arbitrage: Wait and see [6] - Options: Wait and see [6] - **Cotton Yarn Industry News** - The trading in the pure cotton yarn market has almost stopped, only Xinjiang maintains a certain level of sales. The cotton yarn price is generally stable, with some spinning mills raising prices, and some planning to raise prices after the Spring Festival. Spinning mills will start to have a concentrated holiday tomorrow [6][8] - As the Spring Festival approaches, the delivery and shipment in the all - cotton grey fabric spot market have gradually decreased, and the trading is sluggish. Most factories have already had a holiday. Weaving factories will start work from the eighth to the tenth day of the first lunar month, but full resumption of production will be after the fifteenth day of the first lunar month [8] 3.3 Options - **Option Contract Information**: On January 19, 2026, for CF605C14600.CZC, the closing price was 334.00, with a decrease of 16.9%, and the implied volatility was 13.3%. Similar information is provided for other option contracts [10] - **Volatility**: The 60 - day HV of cotton yesterday was 9.2812, with a slight increase. The implied volatilities of different option contracts were different [10] - **Option Strategy**: Wait and see [12]

1. Report Industry Investment Rating - No information provided in the report 2. Core View of the Report - The cotton fundamentals remain strong with upward potential in the long - term. It is recommended to build long positions on dips. The short - term trend of US cotton and Zhengzhou cotton is likely to be range - bound [5][6] 3. Summary by Directory 3.1 Market Information - **Futures Disk**: The closing prices of CF01, CF05, and CF09 contracts decreased by 70; CY05 decreased by 45 and CY09 decreased by 25. The trading volume of most contracts decreased, and the open interest of some contracts changed. For example, the trading volume of CF05 decreased by 13,325, and the open interest decreased by 270 [2] - **Spot Price**: CCIndex3128B decreased by 45 to 15,967 yuan/ton; Cot A was 72.80 cents/pound; FC Index:M: to - port price decreased by 0.08 to 71.46; some other spot prices remained unchanged [2] - **Price Difference**: Cotton and棉纱 inter - month spreads and cross - variety spreads showed different changes. For example, the 1 - 5 month spread of cotton was 530 with no change, and the CY05 - CF05 spread increased by 25 to 5,750 [2] 3.2 Market News and Views - **Cotton Market News**: In 2026, the national cotton planting intention area is 46.479 million mu, a year - on - year decrease of 827,000 mu (1.7%); as of the end of January, the in - stock industrial cotton inventory of textile enterprises was 1.001 million tons, an increase of 17,200 tons from the end of last month; as of February 5, the inventory of ICE deliverable No. 2 cotton futures contracts was 74,997 bales, compared with 47,653 bales the previous day [4] - **Trading Logic**: There are news about the reduction of cotton planting area in Xinjiang. It is expected to decrease by 2.66 million mu to 36.21 million mu in 2026, a 7% decrease. Some large planters have received relevant notices. Several large textile projects are expected to be launched in Xinjiang, which is beneficial to cotton consumption [5] - **Trading Strategy**: In the short - term, US cotton and Zhengzhou cotton are likely to be range - bound. It is advisable to build long positions on dips. For arbitrage and options, it is recommended to wait and see [6][8] - **Cotton Yarn Industry News**: Zhengzhou cotton fluctuates. The trading in the pure cotton yarn market is light. Xinjiang maintains a certain level of sales, while inland yarn mills are in the process of finishing work, mainly for stocking and fulfilling previous orders. Yarn mills are starting to take holidays one after another, and the quotes remain stable. The shipment of the all - cotton grey fabric market is weak, and most weaving factories are on holiday. It is expected that there will be no significant actions in the market before the Spring Festival, and weaving factories will adjust grey fabric prices according to the market situation after the festival, with a cautious attitude towards the future market [7][10] 3.3 Options - **Option Data**: The closing prices of some cotton options decreased, such as CF605C14600.CZC decreased by 16.9%, and the implied volatilities of different options were different. For example, the implied volatility of CF605 - C - 14600 was 13.3% [12] - **Volatility and Strategy**: The 60 - day HV of cotton increased slightly compared with the previous day. The PCR of the main contract of Zhengzhou cotton decreased. It is recommended to wait and see for options [12][13][14] 3.4 Related Attachments - The report provides multiple charts, including the 1% tariff - based domestic and foreign cotton price difference, cotton 1 - month, 5 - month, and 9 - month basis, CY05 - CF05 and CY01 - CF01 spreads, and CF9 - 1 and CF5 - 9 spreads [15][20][25]