Core Points - The U.S. government shutdown has entered its eighth day, with no signs of compromise between the two parties despite ongoing negotiations [1][3] - The core issue of contention is healthcare subsidies, with both parties entrenched in their positions, leading to a stalemate [4][10] - The White House has indicated that furloughed federal employees may not receive automatic back pay, a departure from past practices, which has intensified the political pressure [5][18] Group 1: Legislative Developments - The Senate has repeatedly failed to pass temporary funding bills, with both Republican and Democratic proposals being rejected [4][10] - The Republican plan aims to resume government operations without extending healthcare subsidies, while the Democratic plan seeks to extend pandemic-era healthcare subsidies until 2026 [4][10] - The lack of a viable bipartisan negotiation framework has resulted in a battle of endurance rather than constructive dialogue [4][10] Group 2: Economic Impact - The shutdown has led to significant operational disruptions, including delays at major airports due to air traffic controller shortages and a halt in IPO approvals by the SEC [6][11] - The SEC has reported that over 90% of its employees are on leave, which could severely impact market activities and corporate financing [6][11] - Economic models suggest that the shutdown could result in approximately $15 billion in GDP losses per week, raising concerns about long-term financial stability [13][18] Group 3: Potential Outcomes - Analysts predict three possible scenarios: a quick resolution within 5-10 days, a prolonged stalemate lasting 2-3 weeks, or a worst-case scenario extending up to a month [11][12][13] - A quick resolution is seen as likely due to mounting economic pressures and public sentiment, which could force a compromise [11][18] - If the impasse continues, it may lead to significant political and economic repercussions, including a potential credit rating downgrade [13][18] Group 4: Political Dynamics - Public opinion is expected to play a crucial role in influencing the negotiations, particularly as federal employees face financial strain [17][18] - Market sentiment is also shifting, with concerns about regulatory gaps and data availability affecting financial sectors [17][18] - Internal divisions within both parties may create opportunities for compromise, as moderate Republicans and some Democrats express the need for fiscal constraints [17][18]

Report Summary 1. Investment Rating The report does not provide an investment rating for the cotton industry. 2. Core View ICE cotton declined due to a lack of fundamental support and a strengthening US dollar. Chinese cotton futures fell by over 4% due to concerns about "low - value" warehouse receipts and a cooling financial market sentiment. Although the adjustment of Zhengzhou cotton futures is considered to be phased in place from a fundamental perspective, it is expected to oscillate around 13,600 as the financial market adjustment risk persists, and attention should be paid to policy trends and downstream demand [1][17]. 3. Summary by Section 3.1 Market Data | Variety | Opening Price | High | Low | Closing Price | Change | Change % | Volume (lots) | Volume Change (lots) | Open Interest (lots) | Open Interest Change (lots) | | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | | ICE Cotton Continuous | 68.38 | 68.77 | 66.34 | 66.42 | -1.81 | -2.65 | 113,716 | 39,003 | 157,336 | 2,339 | | Zhengzhou Cotton Continuous | 14,175 | 14,375 | 13,535 | 13,585 | -585 | -4.13 | 1,550,030 | 324,029 | 325,813 | -178,992 | | Cotton Yarn Continuous | 20,375 | 20,540 | 19,680 | 19,740 | -630 | -3.09 | 56,601 | 7,949 | 4,310 | -6,492 | [4] 3.2 Fundamental Analysis 3.2.1 International Cotton Situation - **ICE Cotton**: Declined this week due to good growth of new US cotton crops, average export sales data, lack of positive news from trade negotiations, and a strengthening US dollar [5]. - **US Cotton Export Sales Data**: As of the week ending July 24, 2024/25 US upland cotton net sign - on was 0.89 million tons; 2025/26 US upland cotton sign - on was 1.63 million tons. 2024/25 US upland cotton weekly shipments were 5.24 million tons, up 25% week - on - week and 10% from the four - week average. The total sign - on volume of 2024/25 US upland and Pima cotton was 2.7835 billion tons, accounting for 108% of the annual forecast export volume; the cumulative export shipments were 2.5934 billion tons, accounting for 93% of the annual total sign - on volume [5]. - **Other Major Cotton - Producing and Consuming Countries** - **India**: Sowing progress was slightly slower than last year. As of July 25, the cotton planting area was 10.3 million hectares. The total sales volume this year reached 7.3 million bales. In June, the textile production index rose 3.7 to 107.5, and the clothing manufacturing index rose 1.2 to 127.7 [6]. - **Australia**: The area of new crops was uncertain. The expected output was 5.4 - 5.5 million bales (about 1.25 million tons), up over 10% from the previous season. A large part was low - grade cotton. As of July 30, the water storage in the Murray - Darling Basin was 62% of the total capacity [7]. - **Pakistan**: Cotton import demand was weak, and cotton yarn export might improve. The new - season cotton output was expected to be between 6.5 - 7.5 million bales. The import tax policy change was expected to slow down transactions. Cotton yarn export inquiries increased [8]. - **Southeast Asian Textile Industry Operating Rates**: As of the week ending August 1, India's textile enterprise operating rate was 73%, Vietnam's was 63.5%, and Pakistan's was 64% [9]. 3.2.2 Domestic Cotton Situation - **Cotton Spot Price**: Fell this week, and trading improved. The basis of spot cotton increased overall after the decline of Zhengzhou cotton futures [10]. - **Cotton Warehouse Receipts**: As of August 1, the registered warehouse receipts of No. 1 cotton were 8,807, and the forecast warehouse receipts were 348, totaling 9,155, equivalent to 384,510 tons [11]. - **Downstream Market**: The downstream trading of pure - cotton yarn became worse. The transaction volume decreased, the price center shifted down, and the inventory of spinning enterprises accumulated. The all - cotton grey fabric market remained dull, with prices falling and trading not improving [12]. 3.3 Operational Suggestions - **ICE Cotton**: Pay attention to the technical support at the June low and the tariff negotiations between the US and countries such as China and India [17]. - **Domestic Cotton Futures**: It is expected to oscillate around 13,600. Wait for the financial market sentiment to stabilize, and pay attention to policy trends and downstream actual demand [17].

Group 1: Report Industry Investment Rating - No relevant content found Group 2: Report's Core View - ICE cotton futures are in a volatile market. The end of the July contract, the easing of the Middle - East situation, and the dovish remarks of Federal Reserve officials have pushed up market risk appetite and led to a rebound from the low level. Attention should be paid to the US Department of Agriculture's area outlook report on June 30 and the results of US tariff negotiations with other countries [18]. - Domestic cotton futures continue to rise in a volatile manner, following the fluctuations of the financial market sentiment. The price is supported by concerns about tight domestic cotton inventory, but the poor downstream operation restricts the upward momentum. Overall, it is still in a volatile trend. To break through the resistance at 14,100, more supply - side drivers are needed, and attention should be paid to the financial market sentiment and international economic and trade situation [2][18]. Group 3: Summary by Related Catalogs 1. Market Data - ICE Cotton Main Continuation: Open price 66.70, high 69.52, low 66.27, close 69.32, up 2.56, up 3.83%, volume 124,415 lots, volume change 14,821 lots, open interest 152,992 lots, open interest change - 3,971 lots [5]. - Zhengzhou Cotton Main Continuation: Open price 13,500, high 13,775, low 13,425, close 13,760, up 265, up 1.96%, volume 1,042,381 lots, volume change 310,558 lots, open interest 591,022 lots, open interest change 66,040 lots [5]. - Cotton Yarn Main Continuation: Open price 19,740, high 20,155, low 19,660, close 20,105, up 370, up 1.87%, volume 39,928 lots, volume change 5,128 lots, open interest 21,860 lots, open interest change 203 lots [5]. 2. Fundamental Analysis International Cotton Situation - ICE cotton has continued to rebound, rising nearly 4% from the low this week. The end of the July contract has relieved the pressure of US cotton warehouse receipts, and the easing of the Middle - East situation and optimistic expectations for tariff negotiations have contributed to the rebound [1][5]. - US cotton weekly export sales data: As of the week ending June 19, 2024/25 US upland cotton weekly contracts were 0.62 million tons, down 67% week - on - week and 71% from the four - week average; weekly shipments were 4.18 million tons, down 10% week - on - week and 29% from the four - week average. The total signed sales volume of US upland and Pima cotton in 2024/25 was 2.7559 billion tons, accounting for 110.2% of the annual forecast export volume, and the cumulative export shipments accounted for 85% of the total annual contracts [6]. - India: Sowing progress exceeds last year. In 2024/25, domestic production increased by 980,000 bales to 30.12 million bales, and consumption decreased by 200,000 bales to 30.5 million bales. As of June 20, the cotton planting area was 1.3784 million hectares, an increase of 105,300 hectares compared to last year. In April, raw cotton imports increased by 33% month - on - month, and exports decreased by 27% month - on - month. Textile exports in April were $1.925 billion, down 8% month - on - month and up 17% year - on - year [8]. - Brazil: The new crop has started to be harvested. The 2025 cotton production forecast has been raised to 3.915 million tons. 97% of the 2024 crop has been sold, about 65% of the 2025 crop has been sold in the first - hand, and about 25% of the 2026 expected production has been sold to traders. The cotton export volume in the first two weeks of June is expected to be about 72,000 tons [8]. - Turkey: Textile enterprises are in a low - mood. The next - season consumption is expected to decline, and the current crop output is predicted to be about 800,000 tons, down from 850,000 tons in 2024/25 [9]. - Pakistan: Cotton import demand is weak. As of June 19, the actual sowing area in Punjab reached 89% of the plan, and Sindh only completed 65%. The early - stage output forecast remains between 6.5 million and 7.5 million bales. The export volume of five major textile categories in May was $1.26 billion, up 26.5% month - on - month but slightly lower than last year [10]. - Bangladesh: Waiting for the clarification of US tariff policies. Cotton demand has slightly increased recently, but new orders are emerging more slowly. The IMF has approved a loan of about $1.3 billion [11]. - Southeast Asian textile industry startup rates: As of the week ending June 27, India's textile enterprise startup rate was 73%, Vietnam's was 65%, and Pakistan's was 60% [11]. Domestic Cotton Situation - Cotton spot trading is weak with rising prices. Spot trading is generally cold, and textile enterprises mainly make rigid - demand purchases. As of June 27, the total number of No. 1 cotton registered warehouse receipts and forecast warehouse receipts was 10,597, equivalent to 445,074 tons [12]. - Downstream trading remains sluggish. The pure - cotton yarn market is in a slack season, with prices rising slightly in some areas. Spinning enterprises are suffering large losses, and their inventory is increasing. The full - cotton grey fabric market is also in a slack season, with prices stable, and weaving factories may further reduce prices to destock. The current startup level is 45.5%, lower than the same period in previous years [13][14]. 3. Basic Data Charts - The report provides 14 basic data charts, including Xinjiang cotton cumulative processing volume, cotton commercial inventory, spinning enterprise cotton inventory, etc., but no specific data analysis is provided in the text [15][16][17]. 4. Operation Suggestions - ICE cotton futures are in a volatile market. Pay attention to the US Department of Agriculture's area outlook report on June 30 and the results of US tariff negotiations with other countries [18]. - Domestic cotton futures are also in a volatile trend. To break through the resistance at 14,100, more supply - side drivers are needed, and attention should be paid to the financial market sentiment and international economic and trade situation [18].