Group 1 - The core viewpoint of the news is that cotton futures prices on the ICE are experiencing fluctuations, with a recent increase noted in the trading session on January 5, where prices rose to 64.40 cents per pound, marking a 0.61% increase from the opening price of 64.30 cents per pound [1] - On January 2, the opening price for cotton futures was 64.28 cents per pound, with a closing price of 63.87 cents per pound, reflecting a decrease of 0.64% [2] - As of January 4, 2025, the cumulative public inspection of cotton reached 28.9834 million bales, totaling 6.5425 million tons, which is a year-on-year increase of 13.7% [2] Group 2 - The National Bureau of Statistics reported that the cotton production in 2025 is projected to be 6.641 million tons, an increase of 477,000 tons or 7.7% compared to the previous year [2] - As of January 3, 2026, the cumulative public inspection volume of the new cotton year reached 6.4946 million tons [2]

1. Report Industry Investment Rating No relevant information provided. 2. Core View of the Report The market had long anticipated the reduction in cotton planting area in Xinjiang. Currently, the price of Zhengzhou cotton has reached a recent high, and the price volatility may increase. Fundamentally, the off - season is not slow, with a decent downstream operating rate. Despite domestic production increase, imports are restricted, and the supply - demand relationship is balanced. Coupled with positive expectations, the price trend of Zhengzhou cotton is strong. It is recommended to wait for a pullback and then go long [9]. 3. Summary According to the Directory 3.1 Monthly Assessment and Strategy Recommendation - **Market Review**: In December, the price of US cotton futures fluctuated within a narrow range. By December 31, the closing price of the March contract of US cotton futures was 64.3 cents per pound, a decrease of 0.43 cents per pound or 0.66% from the previous month. The spread between the March - May contracts of US cotton was - 1.32 cents per pound, a decrease of 0.08 cents per pound from the previous month. Domestically, the price of Zhengzhou cotton rose significantly in December. The closing price of the May contract of Zhengzhou cotton was 14,585 yuan per ton, an increase of 900 yuan per ton or 6.58% from the previous month. The China Cotton Price Index (CCIndex) 3128B was 15,556 yuan per ton, an increase of 660 yuan per ton from the previous month. The basis was 971 yuan per ton, a decrease of 240 yuan per ton from the previous month. The spread between the January - May contracts of Zhengzhou cotton was 70 yuan per ton, an increase of 30 yuan per ton from the previous month [9]. - **Industry Information**: In December 23, 2025, the Office of the Leading Group for the Development of the Cotton Industry in the Autonomous Region held a special meeting on reducing the cotton planting area in Xinjiang. According to data released by the General Administration of Customs, in November 2025, China imported 120,000 tons of cotton, an increase of 10,000 tons year - on - year. From January to November 2025, China's cumulative cotton imports were 900,000 tons, a decrease of 1.6 million tons year - on - year. As of the end of November in the 2025/26 season (from August to July of the following year), China's cotton imports were 880,000 tons, a decrease of 410,000 tons year - on - year. According to the latest data released by Mysteel, as of the week ending December 26, the operating rate of spinning mills was 64.7%, a decrease of 0.5 percentage points from the previous week, an increase of 2.3 percentage points compared with the same period last year, and a decrease of 6.7 percentage points compared with the average of the past five years (71.4%). The national commercial cotton inventory was 5.17 million tons, an increase of 100,000 tons year - on - year. The latest December monthly supply - demand report data released by USDA showed that the global cotton production forecast for the 2025/26 season was revised down by 60,000 tons to 26.08 million tons compared with November. Among them, the production forecast for the United States was revised up by 30,000 tons to 3.11 million tons; the production forecast for Brazil remained at 4.08 million tons; the production forecast for India remained at 5.23 million tons; and the production forecast for China remained at 7.29 million tons [9]. - **View and Strategy**: Wait for a pullback and then go long [9][10][11]. 3.2 Spread Trend Review The report presents multiple spread trend charts, including the China Cotton Price Index, the basis trend of the main contract of Zhengzhou cotton, import profit, Zhengzhou cotton monthly spreads, the Zhejiang - Xinjiang spread, the spinning mill's immediate profit, and various spreads of US cotton and international cotton price spreads, but no specific text analysis of these trends is provided [24]. 3.3 Domestic Market Situation - **Domestic Cotton Production**: Charts show the processing and inspection quantity of cotton in China and the purchase price of Xinjiang seed cotton [38]. - **Cotton Import Volume**: Charts show China's monthly and annual cumulative cotton import volumes [40]. - **US Export Contract Quantity to China**: Charts show the cumulative and weekly export contract quantities of the US to China [42]. - **Cotton Yarn Import Volume**: Charts show China's monthly and annual cumulative cotton yarn import volumes [44]. - **Downstream Operating Rate**: Charts show the operating rates of spinning mills and weaving mills [47]. - **National Sales Progress**: Charts show the national cotton sales progress and the daily trading volume of the Light Textile City [49]. - **Cotton Inventory**: Charts show China's weekly commercial cotton inventory and the monthly inventory of commercial + industrial cotton [52]. - **Spinning Mill's Raw Material and Finished - Product Inventory**: Charts show the cotton inventory and yarn inventory of spinning mills [54]. 3.4 International Market Situation - **US Planting Situation**: Charts show the proportion of the US cotton - planting area without drought, the cotton good - quality rate, the bi - weekly and cumulative processing volumes of US cotton [58]. - **US Production and Planting Area**: Charts show the production forecast and planting area of US cotton [61]. - **US Export Contract Progress**: Charts show the cumulative and weekly export contract quantities of US cotton in the current year [65]. - **US Export Shipment Volume**: Charts show the annual cumulative and weekly export shipment volumes of US cotton [67]. - **US Supply and Demand Situation**: Charts show the supply surplus/shortage and inventory - to - consumption ratio of US cotton [69]. - **Brazilian Production and Planting Area**: Charts show the planting area and production of Brazilian cotton [70]. - **Brazilian Export Volume**: Charts show the export volume of Brazilian cotton [73]. - **Brazilian Supply and Demand Situation**: Charts show the supply surplus/shortage and inventory - to - consumption ratio of Brazilian cotton [76]. - **Indian Production and Planting Area**: Charts show the planting area and production of Indian cotton [78]. - **Indian Consumption and Import - Export**: Charts show the consumption, import, and export volumes of Indian cotton, as well as the supply surplus/shortage and inventory - to - consumption ratio [81].

Core Viewpoint - The cotton futures market has experienced significant volatility, with prices soaring to 14,700 before stabilizing, reflecting a complex interplay of market dynamics and the cautious behavior of processing factories [1] Group 1: Current Market Dynamics - The sudden price surge was an unexpected benefit for processing factories, which capitalized on low inventory levels to sell at high prices, resulting in substantial profits [1] - Following the initial spike, processing factories reverted to a more cautious approach, opting for stable and quick sales, indicating a desire to secure profits and maintain cash flow [1] Group 2: Market Support Factors - Rapid sales of seed cotton and lint cotton indicate that farmers are actively selling, leading to a decrease in cotton inventory, particularly of high-quality cotton, which supports prices [2] - Structural reduction in planting areas is a significant future signal, with plans to reduce low-efficiency cotton areas by 2026, concentrating resources in high-yield regions, which will enhance the overall quality and competitiveness of Xinjiang cotton [2] - Short-term demand from textile factories preparing for the upcoming holiday season is driving current purchases, but the sustainability of this demand is uncertain post-holiday [2] Group 3: Recommendations for Cotton Farmers - Farmers are advised to adopt a selling strategy that capitalizes on the current favorable market conditions, allowing for more negotiation power with processing factories [3] - It is crucial for farmers to understand the implications of structural adjustments in planting areas, focusing on improving yield and quality to align with national policies favoring high-efficiency cotton production [4]

Report Industry Investment Rating - The rating for cotton is "Bullish" [1] Core Viewpoints of the Report - The supply-demand outlook for the cotton market is tightening, and the cotton market is expected to fluctuate upward. In 2026, the ICE cotton price is expected to be volatile and bullish, with an estimated operating range of 60 - 80 cents per pound. The Zhengzhou cotton market is also generally optimistic, with an estimated range of 13,300 - 16,500 yuan per ton [1][2][165][167] Summary According to the Directory 1. 2025: Trade War and Strong Demand Caused Volatility in Zhengzhou Cotton, with a Strong Domestic and Weak Overseas Performance - In 2025, Zhengzhou cotton showed a wide - range volatile trend. The trade war intensified the fluctuations, but strong domestic demand provided support. The main contract price of Zhengzhou cotton operated between 12,300 - 14,300 yuan per ton, while the overseas market was generally weak, operating between 60 - 70 cents per pound [14] - From January to March, Zhengzhou cotton was relatively resistant to decline compared to the overseas market, and the internal - external price difference widened. The overseas market was weak due to the expected supply - demand loosening and trade war concerns [14] - From April to May, trade policy changes led to increased volatility in both domestic and overseas markets. Zhengzhou cotton first fell and then rose, and the internal - external price difference first narrowed and then expanded [15] - From June to August, rapid domestic commercial inventory depletion and a strong commodity atmosphere drove up Zhengzhou cotton, while the overseas market was weak [15] - In September, the expectation of increased Xinjiang cotton production led to a decline in Zhengzhou cotton, and the internal - external price difference narrowed [16] - From October to December, Zhengzhou cotton continued to rise, and the internal - external price difference widened further. The overseas market was under pressure due to weak export demand and seasonal supply pressure [16] 2. International Cotton Fundamental Situation 2.1 United States - **25/26 Season**: The supply of US cotton was relatively loose. The planting area decreased by 16.8% to 9.3 million acres, the yield decreased slightly by 1% to 3.107 million tons, and the ending inventory increased by 12.5% to 980,000 tons. The export signing progress was slow, but there is a possibility of improvement in the second half of the season [20][29][30] - **26/27 Season**: The planting area is expected to decrease by about 3.3% to around 9 million acres. The yield is estimated to be between 2.94 - 3.31 million tons. The supply - demand pattern is expected to tighten, and the ICE cotton price is estimated to operate between 60 - 80 cents per pound [34][35][45] 2.2 India - **25/26 Season**: The production is expected to be stable at around 5.225 million tons, but there is a possibility of downward adjustment. The consumption may be revised downwards due to trade issues. CCI's large - scale purchases will increase import demand [50][51][53] - **26/27 Season**: The planting area is expected to decline due to low cotton - grain price ratios and flood - damaged farmer incomes [62] 2.3 Brazil - The 26/27 season's planting and production are expected to decline slightly. As of December 20, 2025, the planting progress was 16.9%, 3 percentage points slower than the previous year. Different institutions have different estimates of the production decline, generally around 5 - 10% [65][66][67] 2.4 Global - **25/26 Season**: The global cotton supply - demand is in a loose balance, with production slightly increasing by 0.4% to 26.081 million tons and consumption slightly decreasing by 0.3% to 25.824 million tons [70] - **26/27 Season**: The global planting area is expected to decrease by about 5%, and the production is estimated to decline by 800,000 - 1.5 million tons. The consumption is expected to increase slightly by about 1.2% (310,000 tons), resulting in a supply - demand shortage of 800,000 - 1.5 million tons [73] 2.5 Summary and Market Outlook of the International Cotton Market - The market focus will gradually shift to the 26/27 season. The global economic recovery is expected to improve cotton demand, and the supply - demand situation in the 26/27 season is expected to tighten. The ICE cotton price is estimated to operate between 60 - 80 cents per pound [82][85][86] 3. Domestic Cotton Fundamental Situation 3.1 25/26 Season Xinjiang Cotton - The output is expected to increase, with the estimated output between 7.3 - 7.5 million tons. The seed - cotton purchase price was stable, and the ginning mills' processing and sales progress was fast [87][91][94] 3.2 2026 Xinjiang Cotton Planting Area - It is likely to be reduced, but the reduction幅度 is uncertain. Policy regulation and farmers' planting willingness are the key factors [95][97][99] 3.3 Commercial Inventory - Although the domestic cotton production increased in the 25/26 season, the commercial inventory was basically the same as the previous year. The market is worried about a repeat of the supply shortage in the 24/25 season [101][102] 3.4 Imports - **Cotton**: The import quota is expected to be strictly controlled in the 25/26 season, with an estimated commercial import volume of about 1.1 million tons [104] - **Cotton Yarn**: The import volume is expected to increase by more than 300,000 tons, depending on the future internal - external cotton price difference [105] 3.5 Downstream Textile Industry - The industry is highly competitive, with low profits. The cotton - yarn social inventory is relatively healthy, but there are blockages in the downstream weaving mills and their subsequent sectors [110][113][119] 3.6 Terminal Textile and Apparel - **Export**: The export of textile and apparel is resilient. The demand from Belt and Road countries stabilizes textile exports, and the export to the US and the EU is expected to improve in 2026 [127][134][139] - **Domestic Demand**: It is expected to maintain a moderate growth trend, supported by policy but also affected by factors such as the real - estate market and industry competition [157] 3.7 Domestic Supply - Demand Balance Sheet - **25/26 Season**: The supply - demand is expected to be in a tight balance, with an estimated output of about 7.7 million tons, an import of about 1.1 million tons, and a consumption of 8.6 - 8.7 million tons [160] - **26/27 Season**: The supply - demand gap is expected to widen, and the state may need to issue additional import quotas or conduct state reserve sales [162] 4. Summary and Outlook - Internationally, the supply - demand outlook is tightening, and the ICE cotton price is expected to be volatile and bullish in 2026, with an estimated range of 60 - 80 cents per pound [165] - Domestically, the Zhengzhou cotton market is generally optimistic in 2026, with an estimated range of 13,300 - 16,500 yuan per ton. Attention should be paid to factors such as inventory depletion, imports, and consumption [167] 5. Strategy Recommendations - **Unilateral**: It is recommended to take a long position on dips [4][170] - **Arbitrage**: Consider the 5 - 9 reverse spread, but the weakening space of the spread is expected to be limited [4][170]

1. Report Industry Investment Rating - Not provided in the content 2. Core Viewpoints of the Report - In 2026, the core logic of the Zhengzhou cotton market will revolve around the adjustment of Xinjiang's direct subsidy policy and the marginal repair of demand, and the market is expected to show characteristics of "strengthened bottom support and an upward shift in the range - bound oscillation" [4]. - The global cotton supply is unlikely to increase significantly, and the slow reduction of the previously excessive inventory will gradually push the global supply - demand pattern from a loose to a tight balance [115]. - The improvement in demand is more likely to be "gradual" rather than a rapid rebound. The domestic textile industry has resilience, and overseas restocking demand has the potential to be released [116]. - Throughout 2026, the cotton price will be under pressure in the short - term at the beginning of the year, and the price center may gradually rise after the second quarter. In the fourth quarter, if the tight - balance pattern of supply and demand is consolidated, the cotton price is expected to further repair its valuation [117]. 3. Summary by Relevant Catalog 3.1 Market Review 3.1.1 Futures Market Review - In the Zhengzhou cotton market in 2025, the cotton price showed a step - by - step downward trend in the first half of the year, with fluctuations due to factors such as policy expectations, trade frictions, and supply - demand relationships. In the second half of the year, it was affected by factors such as the expectation of supply shortage and the release of downstream demand, showing a volatile upward trend [11]. - In the US cotton market in 2025, due to factors such as the high inventory of old crops in major producing areas, the repeated Sino - US tariff policies, and the lack of Chinese buying, the price remained in a low - level oscillation range of 60 - 70 cents per pound in the first half of the year, and the oscillation center dropped to 65 cents per pound in the second half of the year [12]. 3.2 Overseas Cotton Market Supply - Demand Analysis 3.2.1 Global Supply - Demand Balance Overview - According to the December USDA report, the marginal adjustment of the global cotton market is relatively small, with a neutral - bearish impact on the global market. The global cotton output is slightly reduced, consumption is slightly decreased, trade volume is slightly adjusted downward, and the ending inventory and inventory - to - consumption ratio are slightly increased [13][14][16]. 3.2.2 US Market Supply - Demand Situation - In the 2025/2026 season, the US cotton production is slightly reduced. Although the planting area decreased due to the low cotton - grain price ratio, the favorable weather during the planting season led to a smaller - than - expected decline in the harvested area and an increase in yield per unit, offsetting some of the early - stage production reduction expectations [23]. - The US cotton export contract performance is poor, but there is a chance of recovery in 2026. The reduction of Sino - US tariffs and the increase in global textile demand will provide opportunities for the recovery of US cotton exports [30]. - The US cotton valuation is at a low level, and the relatively high inventory - to - consumption ratio restricts the upward space of the price. In the short - to - medium - term, the US cotton price may still face upward pressure [34]. 3.2.3 Brazilian Market Supply - Demand Situation - In the 2024/2025 season, the Brazilian cotton output increased, and the export scale in the 2025/2026 season is expected to reach a new high. However, due to the low "grain - cotton price ratio" and the expected deterioration of weather conditions, the cotton production in 2026 is expected to decline [39][40]. 3.2.4 Indian Market Supply - Demand Situation - In the 2024/2025 season, the Indian cotton market showed the characteristics of "decreased production and increased imports", and the supply pattern was dominated by import supplementation. In the 2025/2026 season, the production is slightly reduced, and the ending inventory pressure is relatively large [44]. 3.3 Domestic Cotton Market Supply - Demand Situation 3.3.1 China's Cotton Supply - Demand Balance Sheet - Under the USDA's caliber, the estimated cotton output in the 2025/2026 season is 729.3 million tons, the consumption is 838.16 million tons, and the import is 117.56 million tons. The inventory - to - consumption ratio is at a relatively neutral level in the past three years [46]. - Under the BCO's caliber, the estimated output in the 2025/2026 season is 768 million tons, the consumption is 858 million tons, and the import is 120 million tons. The short - to - medium - term inventory pressure may be higher than that in the 2024/2025 season, but it is still relatively loose [46]. 3.3.2 Cost - The cost of lint cotton in the new year is stable, and the processing and sales of new cotton are relatively fast. The cost of lint cotton is roughly locked in the range of 14,374 - 15,246 yuan per ton, and the hedging pressure on the futures market has been greatly relieved [53]. 3.3.3 Output - The cotton output in the 2025/2026 season reaches a peak in the past ten years, but there are still narrow fluctuations. The output in Xinjiang is expected to increase by 7% - 10% year - on - year. The new direct subsidy policy in Xinjiang may lead to a reduction in production, and the weather conditions during the planting period in 2026 are expected to be worse than those in the 2024 - 2025 period [56][59]. 3.3.4 Import - In the 2024/2025 season, China's cotton imports are at a low level. In the 2025/2026 season, the expected upper limit of imports is limited, with an estimated import volume of about 110 - 120 million tons. The reduction of Sino - US tariffs is beneficial to US cotton exports to China, but the short - to - medium - term import pressure of US cotton may increase [65][66]. 3.3.5 Inventory - Affected by the high - yield in the 2025/2026 season, China's commercial cotton inventory is at a high level in recent years. However, due to the strong downstream consumption resilience, the inventory reduction is better than expected. The inventory of some sample enterprises' pure - cotton yarn is relatively high, while the overall inventory level of textile enterprises in the grey fabric and yarn links is relatively low [74][79]. 3.3.6 Demand - **Load and Profit**: In 2025, the overall starting rate of spinning mills is at a relatively low level, but the resilience after the "Golden September and Silver October" is better than expected. The immediate profit of textile enterprises shows a trend of "decline - repair - re - pressure". The continuous expansion of Xinjiang's cotton - spinning capacity is expected to support the cotton demand in the 2025/2026 season to remain flat or increase slightly [83][85][86]. - **Retail and Consumption**: From January to November 2025, the cumulative monthly retail sales of clothing by Chinese enterprises above the designated size increased moderately year - on - year. In the long - term, due to factors such as population structure changes, domestic terminal cotton - related consumption is still mainly based on rigid demand [90][94]. - **Export**: In November 2025, the decline in textile and clothing exports narrowed, and textile exports resumed growth. The export showed a pattern of "trading volume with price", and the export price of cotton yarn and clothing is at a low level in recent years. The optimization of Sino - US trade relations and the low inventory in the US market provide opportunities for the release of overseas restocking demand [102][106][114]. 3.4 Market Outlook - In 2026, the Zhengzhou cotton price is expected to strengthen its bottom support and gradually rise in the range - bound oscillation. The supply side will gradually shift from a loose to a tight balance, and the demand side will gradually recover. The cotton price will be under pressure in the short - term at the beginning of the year and may rise gradually after the second quarter. In the fourth quarter, if the tight - balance pattern of supply and demand is consolidated, the cotton price is expected to further repair its valuation [115][116][117].

Core Viewpoint - The announcement by the National Grain and Material Reserve Bureau and the Ministry of Finance regarding the rotation of 500,000 tons of Xinjiang cotton is expected to positively influence cotton prices, although current demand from the downstream cotton textile industry remains weak and inventory levels are high [1][6]. Group 1: Cotton Market Reaction - Following the announcement, there was strong bullish sentiment in the domestic cotton market, with some market participants anticipating a significant rise in cotton futures prices [1]. - Despite the initial positive sentiment, the main cotton futures contracts experienced only slight increases and stabilized, indicating that the market had already priced in some of the positive effects of the announcement [1][6]. - The rotation of 500,000 tons of Xinjiang cotton is seen as a measure to prevent large price fluctuations and complicate market speculation [1]. Group 2: Rotation Details - The rotation period for the Xinjiang cotton is set from December 2, 2019, to March 31, 2020, with approximately 7,000 tons available for bidding each day [1]. - The maximum bidding price for the rotation will be dynamically determined based on domestic cotton spot prices, with adjustments made weekly [2]. - The quality requirements for the Xinjiang cotton include specific grades and standards, ensuring that only high-quality cotton is included in the reserves [3]. Group 3: Market Conditions - The domestic cotton market is currently facing high inventory levels, and the new cotton harvest is being released, which may limit the immediate impact of the reserve rotation on prices [6]. - The recent increase in cotton prices has been significant, with main contracts rising over 1,000 yuan per ton since October, indicating that the market may have already absorbed some of the positive news [6]. - The textile industry is not expected to recover to normal export levels in the short term, which may dampen the positive effects of the reserve rotation on cotton prices [6]. Group 4: Xinjiang Cotton Procurement - The procurement of Xinjiang seed cotton is nearing completion, with stable prices for cotton lint being reported [7]. - The average purchase price for machine-harvested seed cotton is between 5.2 to 5.3 yuan per kilogram, while hand-picked cotton is around 6 yuan per kilogram [7]. - As of November 14, the processing volume of Xinjiang cotton lint was reported at 6.48 million tons, slightly lower than the previous year's figures [7].

Report Industry Investment Rating - Not provided in the content Core Viewpoints - ICE cotton has rebounded due to a weaker US dollar, a significant increase in Chinese cotton prices, and improved weekly US cotton export data, but its upward momentum is limited, currently in a low - level consolidation. Domestic cotton prices are driven by market sentiment, with short - term expectations of a slightly bullish but limited - upside trend. Attention should be paid to market sentiment, downstream profits, and out - of - quota cotton import profits [1][2][18] Summary by Directory 1. Market Data - ICE Cotton Main Contract: Opened at 63.75, reached a high of 64.81, a low of 63.48, and closed at 64.46, up 0.81 (1.27%). Volume was 52,219 lots, down 44,678 lots, and open interest was 180,943 lots, down 2,503 lots [6] - Zhengzhou Cotton Main Contract: Opened at 14,045, reached a high of 14,700, a low of 14,010, and closed at 14,535, up 520 (3.71%). Volume was 1,747,852 lots, up 538,313 lots, and open interest was 903,860 lots, up 142,317 lots [6] - Cotton Yarn Main Contract: Opened at 20,050, reached a high of 20,720, a low of 20,045, and closed at 20,585, up 535 (2.67%). Volume was 60,104 lots, up 21,170 lots, and open interest was 23,202 lots, up 381 lots [6] 2. Fundamental Analysis International Cotton Situation - ICE Cotton: A slight rebound due to favorable factors, but overall US cotton export sales are average, so it remains in a low - level consolidation [7] - US Cotton Weekly Export Sales Data: As of the week ending December 11, 2025/26 US upland cotton weekly contracts were 69,100 tons, a 99% week - on - week increase and a 95% increase from the four - week average. 2026/27 US upland cotton weekly contracts were 3,400 tons. 2025/26 US upland cotton weekly shipments were 30,500 tons, a 32% week - on - week increase and a 17% increase from the four - week average. The total signed sales volume of US upland and Pima cotton in the 2025/26 season was 444,700 tons, accounting for 55% of the annual forecasted total exports; the cumulative export shipments were 605,100 tons, accounting for 42% of the total annual contracts [7] - Other Major Cotton - Producing and Consuming Countries: - India: CCI's procurement continues. The total inventory is 944,000 tons. As of December 23, the cumulative market volume this year was 2,006,000 tons, an increase of 272,000 tons from December 17 [8] - Brazil: Planting progress is slow. As of December 20, 2025/26 cotton planting was 16.9% complete, a 6.8 - percentage - point increase from the previous period, 3 percentage points slower year - on - year, and 3.7 percentage points slower than the three - year average [8] - Pakistan: Cotton import demand remains moderate. In November, Pakistan imported 44,000 tons of cotton, a 41.5% decrease from the previous month and a 61.9% decrease year - on - year [9] - Vietnam: Sporadic purchases of imported cotton. Transactions are mainly concentrated in certified cotton such as BCI and US Cotton Trust Protocol [9] - Southeast Asian Textile Industry Startup Rates: As of the week ending December 26, India's textile enterprise startup rate was 66.9%, Vietnam's was 61.9%, and Pakistan's was 65.5% [11] Domestic Cotton Situation - Cotton Prices and Transactions: Domestic cotton spot prices rose significantly in the week of December 26. Spot fixed - price transactions were active, mainly by traders. Spinning mills' purchases were light. As of Friday, the fixed - price quotes for 31 - 41 grade double - 29 cotton with less than 3% impurity in northern and southern Xinjiang were mostly above 15,400 - 15,500 (gross weight). The low - basis price in Kashgar was CF05 + 800 - 900, and in northern Xinjiang, the basis was mostly above 1,000 [12] - Cotton Warehouse Receipts: As of December 26, there were 4,853 registered warehouse receipts and 3,834 pending warehouse receipts for No. 1 cotton, totaling 8,687 receipts, equivalent to 364,854 tons [12] - Spinning Mills and Cloth Mills: The confidence of pure - cotton yarn spinning mills has been boosted, with increased willingness of traders and downstream weavers to replenish stocks, but overall it remains mainly for rigid demand. High - count yarns are in better demand, while medium - and low - count yarns have slow sales and inventory backlogs. Some enterprises reported that year - end foreign trade orders were 30% lower than the same period last year. Pure - cotton yarn prices have followed cotton prices higher, with an expected further increase of 100 - 200 yuan. The inventory pressure of spinning mills is less than in previous years. Xinjiang spinning mills maintain a high startup rate, while inland spinning mills' startup rates continue to decline. The theoretical profit of Xinjiang spinning mills is about 250 yuan/ton, and the cash flow of inland spinning mills is about - 150 yuan/ton. The all - cotton grey cloth market is still divided, with some areas having a stocking market. Weaving mills' inventory is expected to decline slightly before the Spring Festival. Orders are mainly small and scattered, and the export market is mainly for inquiries, with few actual orders [13] 3. Basic Data Charts - The report provides charts on cotton sales progress, commercial inventory, spinning mills' cotton inventory, weaving mills' yarn inventory, spinning enterprises' yarn inventory, cotton cloth enterprises' cotton cloth inventory, yarn enterprises' startup rate, cotton cloth enterprises' startup rate, pure - cotton yarn profit, pure - cotton cloth CGC32 profit, cotton 1 - 5 spread, cotton import profit, cotton basis, and Zhengzhou cotton warehouse receipts [15][16][17] 4. Operational Suggestions - ICE cotton is expected to remain in low - level consolidation in the short term, with attention to external market sentiment. Domestic cotton futures and spot prices continue to strengthen, and the basis remains firm. In the short term, Zhengzhou cotton futures are expected to be slightly bullish but with limited upside. Attention should be paid to market sentiment, downstream profits, out - of - quota cotton import profits, and spot basis changes. It is advisable to wait until after the Spring Festival to trade based on the discussion of Xinjiang's cotton planting area in 2026 [18]

Group 1: Report Industry Investment Rating - The report does not mention the industry investment rating. Group 2: Core Viewpoints of the Report - In the domestic cotton market, short - term fundamentals have limited support. The price increase is driven by the potential long - term benefit of reduced domestic cotton planting area. But the long - term benefit has been factored into the price, and the rapid rise in upstream cotton prices will increase downstream pressure [1][28][29]. - In the international market, the adjustment in the USDA monthly report is limited. U.S. cotton exports are generally weak, but the widening price difference between Chinese and U.S. cotton has increased Chinese purchases, boosting U.S. cotton exports. Indian cotton prices are supported by concerns about a shortage of high - grade cotton. Overall, international cotton prices lack upward momentum but have limited downside in the short term [1][29]. - The operation suggestion is to adopt a bearish trading strategy for Zhengzhou cotton [2][30]. Group 3: Summary by Relevant Catalogs 1. Market Review - In December, Zhengzhou cotton fluctuated slightly before rising, with a gain of over 1,000 yuan/ton, driven by expectations of a significant reduction in new - year cotton planting area and continuous capital inflow [3]. - In December, the international cotton market oscillated at a low level. After the positive news of the Fed's interest rate cut was realized, the USDA report was bearish, and U.S. cotton exports were weak. However, short - covering at low prices and a significant increase in U.S. cotton export data at the beginning of December led to a price rebound [3]. 2. Domestic Market Analysis 2.1 New - year Supply Tightening Expectations - There are strong expectations of a reduction in Xinjiang's cotton planting area and output in 2026. It is rumored that the target planting area for the 2026/27 Xinjiang cotton target price policy will be about 36 million mu, a reduction of 5 - 7 million mu (over 10%) from the previous year. Some cotton - growing areas in southern Xinjiang are prohibited from winter and spring irrigation, increasing uncertainty [5]. - In 2026, cotton planting enthusiasm has been affected. The actual subsidy for the 2025/26 Xinjiang cotton target price may not meet farmers' expectations, which will lead to a reduction in the sown area in 2026. As of December 14, 2025, the cumulative public inspection volume of lint cotton in the 2025/26 season reached 5.3736 million tons, a year - on - year increase of 13.76%. Due to the increase in production, farmers' expected subsidy income may decline, and some cotton - planting entities may face losses [6]. 2.2 Narrowing Export Decline - In November 2025, China's textile and clothing exports showed a narrowing decline. Textile exports increased year - on - year, and the decline in clothing exports eased. The total export of textile and clothing in November was $23.87 billion, a year - on - year decrease of 5.1%, 7 percentage points narrower than in October. Clothing exports were $11.59 billion, a year - on - year decrease of 10.9%, with the decline narrowing by 5 percentage points. Textile exports were $12.28 billion, a 1% year - on - year increase [8]. - After the China - U.S. summit in November 2025, the U.S. reduced tariffs on Chinese goods, and China adjusted counter - tariffs. The market is optimistic about cotton product export orders to the U.S. and the EU in December 2025 and the first quarter of 2026 [9]. 2.3 Short - term Weakening of Downstream and Limited Demand Support - As of December 19, the operating rate of textile enterprises was 47.2%, a week - on - week decrease of 0.4 percentage points, and that of weaving enterprises was 48.7%, a week - on - week decrease of 0.3 percentage points. The operating rates of both types of enterprises have declined, providing limited support for raw materials [12]. - The downstream finished - product inventory has increased, especially in weaving enterprises. As of December 19, the cotton yarn inventory of textile enterprises was 29 days, up 1 day from late November, and the finished - product inventory of weaving enterprises was 34.7 days, up 2.2 days from late November. The inventories of both are at relatively high levels in the past five years [15]. 2.4 Positive Policies and Some Support for Long - term Consumption - The Politburo meeting on December 8, 2025, proposed to continue implementing a more proactive fiscal policy. In 2025, China significantly increased the fiscal deficit rate and the issuance of special bonds, expanding fiscal expenditure and promoting economic stability [17]. - In November 2025, the retail sales of clothing, footwear, and textiles were 154.2 billion yuan, a year - on - year increase of 3.5%. From January to November, the cumulative retail sales were 1359.7 billion yuan, a year - on - year increase of 3.5%. With policy support, consumption in 2026 may have some support [19]. 3. International Market Analysis 3.1 Limited Adjustment and Slight Increase in Global Inventory - The USDA's December cotton supply - demand report showed limited changes compared with November. Global cotton production, consumption, and trade volume were slightly adjusted, and the global ending inventory increased slightly by more than 40,000 bales. The reduction in production in Francophone African countries was offset by an increase in U.S. production. Consumption decreased in Brazil, the U.S., and some Central American countries, and trade volume decreased by over 250,000 bales [22]. 3.2 Overall Weak U.S. Cotton Exports with a Stronger Start in December - As of December 2025, the total signed sales volume of U.S. upland and Pima cotton in the 2025/26 season was 444,700 tons, accounting for 55% of the annual forecast export volume. The cumulative export shipment volume was 605,100 tons, accounting for 42% of the total signed volume [26]. - U.S. cotton exports were weak in November but strengthened in early December. In the week ending December 11, the net increase in U.S. cotton export sales was 304,700 bales, a 99% increase from the previous week and a 95% increase from the average of the previous four weeks. The increase was mainly due to increased Chinese purchases [26].

Report Industry Investment Rating No relevant information provided. Core Viewpoints - The supply - demand outlook for domestic cotton in the new year is tight. With the high - yield of Xinjiang cotton this year, the overall supply increase is narrowing due to last year's low inventory and expected low imports. Meanwhile, consumption is supported by expanding spinning capacity, high - load operation of Xinjiang yarn mills, and improved export prospects. Also, expectations of a reduction in next year's cotton planting area in Xinjiang are strengthening, leading to a continuous and accelerating upward shift in cotton prices [1]. - In the short term, there is a risk of cotton price correction. The slowdown in grey fabric sales is affecting the yarn market, squeezing spinning profits and slightly reducing the operating rate. The increasing price difference between domestic and foreign cotton may boost demand for imported yarn, and the uncertainty of the new - season target price subsidy policy also adds to the risk. However, the overall downstream inventory pressure is not large, so the correction range may be limited [7]. - In the long term, the supply - demand of domestic cotton in the new year may remain tight. The rigid consumption of cotton has increased due to the expansion of downstream textile production capacity. Although domestic cotton production has increased significantly, imports are still needed to fill the gap. The probability of further increasing cotton import quotas is low [15]. Summary by Relevant Catalogs Chapter 1: Core Contradictions and Strategy Recommendations 1.1 Core Contradictions - As of December 25, 2025, the cumulative national new - year cotton notarized inspection volume reached 6.0641 million tons, and the average daily notarized inspection volume has dropped to about 55,000 tons. Domestic cotton commercial inventory has significantly increased, but the overall supply increase in the new year is narrowing. The spot price is firm [1]. - Downstream, the expansion of domestic spinning capacity and high - load operation of Xinjiang yarn mills have increased the rigid consumption of cotton. Domestic demand is growing moderately with policy support, and the reduction of Sino - US tariffs is conducive to the recovery of textile and clothing exports [1]. - This year is the last year of the three - year target price subsidy policy. Market expectations of policy adjustment next year are strong due to food supply policies and water resource issues in Xinjiang. A meeting was held to formulate a plan to reduce cotton planting area, further strengthening the expectation of a reduction in Xinjiang cotton area next year [1]. 1.2 Trading - Type Strategy Recommendations - Price range: CF2605 is expected to trade between 13,700 - 14,800. - Strategy: Long - term long positions can be laid out for CF2605 on dips [17]. 1.3 Industrial Customer Operation Recommendations - Price range forecast for cotton in the near future: 13,700 - 14,800, with a current 20 - day rolling volatility of 0.0817 and a 3 - year historical percentile of 0.1968 [17]. - Inventory management: For enterprises with high inventory worried about price drops, they can short Zhengzhou cotton futures (CF2605) to lock in profits, with a hedging ratio of 50% at 14,700 - 14,800. They can also sell call options (CF2605C14800) to collect premiums, with a hedging ratio of 50% at 350 - 400 [17]. - Procurement management: For enterprises with low procurement inventory, they can buy Zhengzhou cotton futures (CF2605) to lock in procurement costs, with a hedging ratio of 75% at 13,700 - 13,800. They can also sell put options (CF2605P13800) to collect premiums, with a hedging ratio of 75% at 300 - 350 [17]. 1.4 Basic Data Overview - Futures data: Zhengzhou cotton 01 closed at 14,565, up 520 (3.7%); Zhengzhou cotton 05 closed at 14,535, up 520 (3.71%); Zhengzhou cotton 09 closed at 14,720, up 545 (3.84%) [18]. - Spot data: CC Index 3128B was at 15,317, up 172 (1.14%); CC Index 2227B was at 13,583, up 275 (2.07%); CC Index 2129B was at 15,559, up 170 (1.1%) [18]. - Spread data: CF1 - 5 spread was 30 (unchanged); CF5 - 9 spread was - 185, down 25; CF9 - 1 spread was 155, up 25 [18]. - Import price: FC Index M was at 12,898, up 129 (1.01%); FCY Index C32s was at 21,173, up 21 (0.1%) [18]. - Yarn data: Futures price was 20,585, up 535 (2.67%); spot price was 21,140, up 210 (1%) [18]. Chapter 2: Core Contradictions and Strategy Recommendations 2.1 This Week's Important Information - **Positive information**: As of December 18, the national new - cotton picking progress was 99.9% (unchanged year - on - year and compared with the four - year average), the delivery rate was 99.3% (up 0.6 percentage points year - on - year and 1.2 percentage points compared with the four - year average), the processing rate was 88.0% (up 2.0 percentage points year - on - year and 7.9 percentage points compared with the four - year average), and the sales rate was 47.3% (up 25.0 percentage points year - on - year and 28.5 percentage points compared with the four - year average). In November, the retail sales of clothing, footwear, and textiles in China were 154.2 billion yuan, up 4.84% month - on - month and 4.19% year - on - year. In November 2025, the export volume of cotton products was 646,400 tons, up 6.32% month - on - month and 9.84% year - on - year; the export value was $5.274 billion, up 12.74% month - on - month and down 10.67% year - on - year; the export unit price was $8.16/kg, up 6.11% month - on - month and down 18.64% year - on - year [19]. - **Negative information**: In November 2025, China's textile and clothing exports were $23.869 billion, down 5.12% year - on - year and up 7.22% month - on - month. Among them, textile exports were $12.276 billion, up 1.03% year - on - year and 9.05% month - on - month; clothing exports were $11.594 billion, down 10.86% year - on - year and up 5.36% month - on - month. As of December 11, 2025, the cumulative net signed export volume of US cotton for the 25/26 season was 1.445 million tons, down 14.40% year - on - year, reaching 54.39% of the annual expected export volume, and the cumulative shipment was 605,000 tons, with a shipment rate of 41.88% [21]. 2.2 Next Week's Important Events to Watch Keep an eye on the subsequent export situation of US cotton as the current US cotton industry data is lagging [22]. Chapter 3: Disk Interpretation 3.1 Price - Volume and Fund Interpretation - **Unilateral trend and fund movement**: Zhengzhou cotton continued to rise this week with an enlarged increase. Funds actively entered the market, and market activity increased. The position of the main contract continuously increased, with bulls in the dominant position. The market's consensus on a bullish outlook was strong. After the accelerated upward movement of cotton prices on Friday, short - position holdings increased, and the long - short ratio weakened slightly, so short - term correction should be guarded against [26]. - **Month - spread structure**: Currently, Zhengzhou cotton 1 - 5 shows a slight back structure supported by industrial - end delivery, while contracts 05 and later maintain a contango structure. The far - month contracts maintain the expectation of tight supply - demand at the end of the year and show a strong trend [29]. - **Basis structure**: This week, the low - end of the cotton basis remained stable, and the high - end slightly decreased. The pick - up price of machine - picked cotton in Xinjiang was 14,960 yuan/ton for grade 3128B and 15,200 yuan/ton for grade 2129B. The sales basis of machine - picked cotton in Shihezi, Xinjiang, with a impurity content of less than 2.7% for the 2605 contract in Xinjiang warehouses was 920 - 1030 yuan/ton, and the pick - up price was 15,080 - 15,250 yuan/ton [32]. Chapter 4: Valuation and Profit Analysis 4.1 Downstream Spinning Profit Tracking - With policy support and technological innovation, Xinjiang yarn mills have a significant cost advantage over those in the inland, maintaining a certain profit. Inland mills were basically in a slight loss in the third quarter. From September, domestic cotton prices declined under the hedging pressure of ginning mills and the supply pressure of new cotton, while yarn spot prices were relatively stable, restoring domestic yarn mills' profits. In December, domestic cotton prices rebounded, squeezing yarn mills' profits again. This week, as cotton prices further increased and yarn prices slightly increased, yarn mills' profits weakened slightly compared with last week [34][35]. 4.2 Import Profit Tracking - Affected by the Xinjiang cotton ban and tariff policies, the price trends of domestic and foreign cotton are relatively independent. This year, China's cotton import profit has been considerable, but the import quota is low, resulting in a low level of cotton imports. In November 2025, China's cotton import volume was 120,000 tons, up 30,000 tons month - on - month and 10,000 tons year - on - year. The cumulative cotton import volume in the 25/26 season was 310,000 tons, down 30,000 tons year - on - year. This week, domestic cotton prices further increased, and foreign cotton prices stabilized and rebounded, slightly expanding the domestic cotton import profit [37]. Chapter 5: Supply and Inventory Deduction 5.1 Supply - Demand Balance Sheet Deduction - The new - year Xinjiang cotton harvest is basically completed, and the output forecast has been slightly revised upwards. In terms of imports, the National Development and Reform Commission has issued an additional 200,000 - ton sliding - scale duty quota, and together with the 894,000 - ton 1% tariff quota for 2026, the new - year cotton import volume is tentatively estimated at 1.1 million tons. The probability of further increasing the sliding - scale duty quota is low. Downstream, domestic demand may maintain a moderate recovery, and the export market is expected to support domestic cotton consumption due to the easing of Sino - US trade relations [42]. - The supply - demand balance sheet shows that in the 25/26 season, cotton production is expected to be 7.6 million tons, imports 1.1 million tons, consumption 8.6 million tons, and the ending inventory 6.26 million tons, with an inventory - to - consumption ratio of 72.79% [43].

（来源：西域棉花网） （来源：西域棉花网） | | | 中国棉花价格指数:15271 (58) | | | | | | --- | --- | --- | --- | --- | --- | --- | | | | | | | | 单位:元/吨 | | 地区 | 1129B | 2129B | 3128B | 4128B | 1228B | 2227B | | 安徽 | - | 15455 | 15395 | 15000 | 15080 | 13400 | | 重庆 | - | 15500 | 15260 | 15000 | 15050 | 13400 | | 福建 | - | 15435 | 15280 | 15000 | 15050 | 13400 | | 甘肃 | - | 15400 | 15150 | 14850 | 14900 | - | | 广东 | 15600 | 15510 | 15264 | 15000 | 15102 | 13462 | | 河北 | - | 15500 | 15327 | 15030 | 15133 | 13783 | | 河南 | 15765 | 15485 | 153 ...