Core Insights - The article highlights the significant advancements in cotton harvesting technology in Xinjiang, particularly the use of mechanization and drones, which have greatly improved efficiency and productivity in cotton farming [1][2][3] Group 1: Technological Advancements - The use of large-scale cotton harvesting machines and drones has transformed the cotton harvesting process, allowing for faster and more efficient collection of cotton [1][2] - The integration of the Beidou satellite navigation system in machinery has enhanced operational precision in cotton planting and harvesting [1] Group 2: Economic Impact - Farmers report substantial increases in productivity, with one farmer managing 1,900 acres and achieving an average yield of 500 kilograms per acre, significantly reducing labor time from 20 days to just 10 days for harvesting [1][2] - The cotton industry in Xinjiang has seen a rise in confidence among farmers, with many investing in advanced machinery for both cotton cultivation and cross-regional operations, contributing to additional income streams [2] Group 3: Production and Quality - Xinjiang has implemented a comprehensive technological framework to enhance cotton production, achieving a mechanization level of 97% and a good seed coverage rate of 98% for high-quality cotton varieties [3] - The introduction of over 30 new cotton varieties with superior traits, including drought resistance and suitability for mechanical harvesting, is expected to further boost cotton yield and quality [2][3]

Report Industry Investment Rating - The investment view for the cotton industry is "oscillation", indicating a short - term outlook of the market moving within a range [3]. Core View of the Report - The short - term demand side of the cotton market performs averagely, and the supply side maintains a loose pattern, so the cotton futures market may experience range - bound oscillations. Influencing factors such as supply, demand, inventory, etc., present different driving forces. The supply is short - term bearish and long - term bullish; demand, profit, and valuation are bullish; inventory is bearish; and the impact of basis/spread and macro - policy is neutral [3]. Summary by Directory Part One: Main Views and Strategy Overview - **Supply**: Short - term bearish and long - term bullish. Currently in the period of concentrated processing and inspection of new cotton, the selling pressure on the spot market persists. Market expectations include a possible reduction in the cotton target direct subsidy price in the next three years in the Central No. 1 Document in January - February 2026, a possible decrease in the planting area in March 2026, and a seasonal speculation window for domestic production area weather in April 2026 [3]. - **Demand**: Bullish. Downstream yarn mills have low raw material inventories and strong restocking intentions. Seasonal pre - holiday restocking from the end of the fourth quarter to the beginning of the first quarter of 2026 may increase demand. Spinning profits have improved significantly compared to the third quarter, which is beneficial for mill operations and restocking [3]. - **Inventory**: Bearish. As new cotton is massively listed, inventory gradually accumulates [3]. - **Basis/Spread**: Neutral. The basis for pre - sold new cotton delivered before the end of January 2026 is 678, and the spread between Zhengzhou Cotton's January and May contracts fluctuates around - 50 this week [3]. - **Profit**: Bullish. Spinning profits have improved significantly compared to the third quarter, with positive cash - flow profits in Xinjiang and even inland areas, which encourages mill operations and restocking [3]. - **Valuation**: Bullish. The current absolute price is at a relatively low level in the past four years [3]. - **Macro and Policy**: Neutral. Domestically, the increasing domestic demand policies are beneficial for supporting the long - term demand for domestic cotton, which is bullish for far - month contracts. Internationally, there may be a restart of the Fed's interest - rate cut cycle, strengthening the expectation of improved liquidity [3]. - **Investment View**: Oscillation. The short - term demand is average, and the supply is abundant, so the market may move within a range [3]. - **Trading Strategy**: For both single - side and arbitrage trading, it is recommended to wait and see. Key risks to monitor include domestic macro - policies, Sino - US trade policies, and downstream consumption [3]. Part Two: Cotton Fundamental Data - **Production**: The report presents historical data on national and Xinjiang cotton production from 2013 - 2025 [5][6]. - **Inventory**: It includes data on national and Xinjiang commercial inventories, national cotton bonded - area commercial inventories, national industrial inventories, and mid - stream inventories (showing seasonal destocking of finished products). Mid - stream factory loads show a slow recovery in operation rates, and mid - stream yarn mills are currently in a loss - making situation. It also provides data on domestic cotton and cotton yarn imports and US cotton's weekly signing and shipment volumes, with US cotton's exports to China showing sporadic signing and zero shipments [9][14][22][27][32][41]. Part Three: Cotton Capital - related Data - **Basis and Spread**: Zhengzhou Cotton's basis is oscillating at a high level, and the spreads between different contracts are presented. The US cotton's monthly spread shows a Deep Contango pattern [45][64]. - **Position**: Data on Zhengzhou Cotton's contract positions and the net long positions of managed funds in US cotton futures and options are provided [53][59].

1. Report Industry Investment Rating No relevant content provided. 2. Core Viewpoints - The price of cottonseed has slightly increased, and the price of Zhengzhou cotton futures has continued to be strong. In the short - term, the cotton price may fluctuate strongly. Attention should be paid to the progress of Sino - US trade negotiations [2]. - As Zhengzhou cotton rebounds, the price of pure cotton yarn has also slightly followed up, but the downstream demand restricts the follow - up range. The short - term price of cotton yarn is likely to remain stable. The upper limit of Zhengzhou cotton has hedging pressure, and the lower limit has cost support, so it is likely to fluctuate in the short term [3][40]. 3. Summary by Directory 3.1 First Part: Basic Data of Domestic and Foreign Cotton Markets - **One - week Data Overview**: As of October 24, the CRB commodity price index closed at 302.98 points, up 9.63 points from October 17. The ICE cotton futures main contract in December was at 64.18 cents/pound, down 0.11 cents/pound from October 17. Zhengzhou cotton's main 01 contract closed at 13,540 yuan/ton, up 205 yuan/ton from October 17, with an increase of 4,442 lots in positions to 591,000 lots. Spot prices of some cotton - related products also changed slightly [2][10][11]. - **Imported Cotton Quotations**: The CNF quotations of imported cotton from the US and Brazil at the main ports decreased. For example, the price of US E/MOTM decreased by 2.4 cents/pound, and that of Brazil M decreased by 2.1 cents/pound [9]. 3.2 Second Part: Domestic Market Basic Situation - **Textile Mainstream Raw Material Trends**: On October 24, the prices of raw materials showed mixed changes compared with October 17. The price of polyester staple fiber remained unchanged, viscose decreased by 26 yuan/ton, and the prices of CCI3128 and Zhengzhou cotton's main contract increased [14][15]. - **Cotton Yarn Price Trends**: On October 24, the prices of domestic and imported cotton yarns remained stable compared with October 17. The price difference between domestic and imported yarns decreased, and the price difference between domestic cotton spot and imported cotton (under sliding - scale duty) also decreased [18][21][24]. - **Comparison of Domestic and International Cotton Prices**: On October 24, the domestic cotton spot price index CCI3128 was 14,803 yuan/ton. The difference between the spot price index and the imported cotton price under sliding - scale duty decreased compared with October 17. The difference between Zhengzhou cotton and the imported cotton price under sliding - scale duty increased [27]. 3.3 Third Part: Zhengzhou Cotton Market Analysis - **Zhengzhou Cotton Warehouse Receipts and Effective Forecasts**: As of October 24, the registered warehouse receipts of Zhengzhou cotton were 2,653 lots (114,000 tons), with 183 effective forecasts, and the total of warehouse receipts and effective forecasts was 121,000 tons, down from 127,000 tons on October 17 [33]. - **Analysis of Zhengzhou Cotton's Futures - Spot Price Difference**: On October 24, the difference between Zhengzhou cotton's futures price and the CCI3128B index was - 1,432 yuan/ton, an increase from - 1,329 yuan/ton on October 17 [35]. - **Zhengzhou Cotton Price Analysis**: - **Macro - aspect**: The US core CPI growth rate slowed down in September, and the market expected the Fed to cut interest rates. China's GDP growth rate in the third quarter was the slowest this year, but incremental policies were expected to be introduced later [36]. - **Supply - side**: As of October 15, the national commercial cotton inventory increased. The cotton inspection volume was about 70,000 tons per day. The cotton picking progress in Xinjiang was about 67.9% as of October 20, 2.1 percentage points slower than the same period last year [37]. - **Downstream Market**: As of October 15, the textile enterprises' cotton inventory decreased, while the yarn and fabric inventories increased. The downstream demand was weak, and the spinning mills mainly adopted the strategies of selling at market prices and producing on demand [38]. - **Technical Analysis**: The technical indicators of Zhengzhou cotton's main contract turned strong, with the MACD green column turning red and the KDJ and DIFF - DEA indicators about to form golden crosses [42]. 3.4 Fourth Part: International Market Analysis - **US Cotton Export Dynamics**: From September 12 - 18, the net signing of US 2025/26 - year - old upland cotton decreased by 54% compared with the previous week, and the shipment increased by 14%. The net signing of Pima cotton increased significantly, and the shipment of Pima cotton increased compared with the previous week but decreased compared with the average of the recent four weeks [47]. - **ICE Cotton Futures Analysis**: On October 24, the ICE cotton futures main contract in December was at 64.18 cents/pound, down 0.11 cents/pound from October 17. The technical indicators turned strong, with the KDJ indicator about to form a golden cross [50]. 3.5 Fifth Part: Operation Suggestions - Upstream cotton enterprises can hedge risks by calculating the cost of lint cotton based on the purchase price of cottonseed and hedging on the futures market or buying put options [52]. - Downstream spinning mills can consider selling out - of - the - money put options to reduce the purchase cost of lint cotton when the raw material price drops [52].

1. Report Industry Investment Rating No relevant content provided. 2. Core Viewpoints of the Report - This week, the price of US cotton futures fluctuated, with the December contract closing at 64.18 cents per pound, a decrease of 0.11 cents per pound or 0.17% from the previous week. The price of Zhengzhou cotton rebounded slightly, with the January contract closing at 13,540 yuan per ton, an increase of 205 yuan per ton or 1.54% from the previous week. The China Cotton Price Index (CCIndex) 3128B rose to 14,803 yuan per ton, up 19 yuan per ton from the previous trading day. The basis weakened slightly, and the spread between Zhengzhou cotton January - May contracts strengthened slightly [9]. - Due to the US government shutdown, USDA data continued to be suspended. On October 23, the purchase index of machine - picked cotton in Xinjiang was 6.28 yuan per kilogram, up 0.11 yuan per kilogram from the previous week. As of the week of October 24, the spinning mill operating rate was 65.6%, flat compared to the previous week, 7.4 percentage points lower than the same period last year, and 9.6 percentage points lower than the average of the past five years [9]. - Fundamentally, the demand during the peak consumption season this year was weak, and the operating rate of the downstream industrial chain declined significantly compared to the same period in previous years. There is also an expectation of a bumper harvest in the new season in China, leading to significant selling hedging pressure. Although the purchase price of new cotton has increased slightly recently, driving the rebound of Zhengzhou cotton, the fundamentals remain weak, and it is expected that the upward space for cotton prices in the short term is relatively limited [9]. 3. Summary by Relevant Catalogs 3.1 Week - on - Week Assessment and Strategy Recommendation - **Market Review**: US cotton futures prices fluctuated, with the December contract closing at 64.18 cents per pound, down 0.17%. The spread between US cotton December - March contracts was - 1.53 cents per pound, down 0.03 cents per pound. Zhengzhou cotton prices rebounded slightly, with the January contract closing at 13,540 yuan per ton, up 1.54%. The China Cotton Price Index (CCIndex) 3128B was 14,803 yuan per ton, up 19 yuan per ton. The basis weakened slightly to 1263 yuan per ton, down 96 yuan per ton, and the spread between Zhengzhou cotton January - May contracts strengthened to 0 yuan per ton, up 55 yuan per ton [9]. - **Industry Information**: USDA data suspension due to the US government shutdown. Xinjiang's machine - picked cotton purchase index rose to 6.28 yuan per kilogram. The spinning mill operating rate was 65.6%, showing no change from the previous week but lower than the same period last year and the five - year average [9]. - **Viewpoints and Strategies**: Weak demand during the peak season, low downstream operating rates, and expected bumper harvests with high selling hedging pressure. The recent increase in new cotton purchase prices has driven the rebound of Zhengzhou cotton, but short - term upward price space is limited [9]. 3.2 Spread Trend Review The report presents multiple spread trend charts, including the China Cotton Price Index, Zhengzhou cotton basis, import profit, Zhengzhou cotton monthly spreads, US cotton spreads, and other international spread trends, but no specific text analysis is provided [24]. 3.3 Domestic Market Situation - **Cotton Production**: It shows the processing and inspection quantity of Chinese cotton and the purchase price of Xinjiang seed cotton through charts [39]. - **Cotton Imports**: Displays monthly and cumulative annual import volumes of Chinese cotton [41]. - **US Exports to China**: Presents the cumulative and weekly export contract volumes of the US to China [43]. - **Cotton Yarn Imports**: Shows monthly and cumulative annual import volumes of Chinese cotton yarn [45]. - **Downstream Operating Rates**: Presents the operating rates of spinning and weaving mills [48]. - **National Sales Progress**: Displays the national cotton sales progress and the daily trading volume of the Light Textile City [50]. - **Cotton Inventory**: Shows the weekly commercial inventory of Chinese cotton and the combined commercial and industrial monthly inventory [53]. - **Spinning Mill Inventory**: Displays the cotton and yarn inventories of spinning mills [55]. 3.4 International Market Situation - **US Situation**: Includes the proportion of US cotton - growing areas without drought, the cotton good - quality rate, double - weekly and cumulative processing volumes, production and planting area estimates, export contract progress, export shipment volumes, supply surplus/shortage, and inventory - to - consumption ratio [58][60][62]. - **Brazilian Situation**: Covers the planting area, production, export volume, supply surplus/shortage, and inventory - to - consumption ratio of Brazilian cotton [71][74]. - **Indian Situation**: Involves the planting area, production, consumption, import and export volumes, supply surplus/shortage, and inventory - to - consumption ratio of Indian cotton [79][82].

Research Background - Xinjiang is the main cotton-producing area in China, accounting for over 90% of the national cotton output. The planting area in Xinjiang has increased year-on-year, and overall weather conditions have been favorable, but high temperatures and reduced sunlight during the flowering and boll-opening stages have lowered optimistic yield expectations [3]. Research Summary 1. Cotton Growth Status - The visual growth of cotton is good, but actual yield measurements are below expectations. The weight of seed cotton in southern Xinjiang has decreased compared to last year, leading to a significant decline in yield levels. The cotton fiber content has also dropped by 0.5 to 2 percentage points, resulting in a stable or slightly decreased cotton output compared to last year [4]. 2. Change in Yield Expectations - Prior to October, the market expected cotton production to be around 7.5 to 7.6 million tons. However, recent actual yield data suggests production may be just over 7 million tons, with the growth rate dropping from 10% to 5%. The purchase prices for seed cotton have been rising post-holiday, with current high purchase quotes for 38% net fiber content reaching 6.4 to 6.5 yuan/kg [5]. 3. Expected Decrease in Planting Area Next Year - Cotton prices have been weaker compared to previous years, and lower yields are expected to result in reduced profits per mu. Some cotton fields with low yields may be converted to other crops. The prices of intercropped crops have also significantly decreased, diminishing their revenue potential. Policies may further guide the reduction of cotton planting in less suitable areas, reallocating the area for food, oilseed, and high-efficiency crop cultivation [6]. 4. Potential Policy Support Reduction - The target price for Xinjiang cotton is set at 18,600 yuan per ton for 2023-2025, which is the last year of the current subsidy policy. Since the implementation of the target price policy in 2014, cotton production has increased by over 50%, but demand has not shown significant growth. Market expectations suggest that the target price may be reduced next year, with attention on policy documents expected to be released in March/April [8]. 5. Current Market Trend Expectations - Commercial cotton inventory levels are at historical lows, with the registered warehouse receipts for the November contract down 25% year-on-year, currently at 114,000 tons. The main contract is influenced by new cotton supply and demand expectations, with a tightening supply-demand situation anticipated for 2025/26, leading to a noticeable rebound in prices. The current market sentiment is positive regarding next year's cotton prices, with strategies such as the snowball strategy and attention to 1-5 reverse hedging and long call options recommended during the peak processing period [9].

Report Summary 1. Report Industry Investment Rating - Not provided in the given content 2. Core View of the Report - The cotton futures rebounded while the basis was weak. The ICE cotton futures fell again, lacking fundamental data guidance and upward momentum. The domestic cotton spot market had mainly rigid - demand transactions, with the spot basis being stable but weakening in some areas. The cotton yarn market was divided, with limited actual price - increase space due to insufficient downstream orders [1][2][3] 3. Summary According to Relevant Catalogs 3.1 Fundamental Tracking - **Futures Data**: CF2601 closed at 13,535 yuan/ton with a - 0.04% daily increase and 13,540 yuan/ton in the night session with a 0.04% increase; CY2601 closed at 19,760 yuan/ton with a - 0.08% daily increase and 19,750 yuan/ton in the night session with a - 0.05% increase. ICE cotton 12 was at 63.65 cents/pound with a - 1.18% daily increase. The trading volume of CF2601 was 268,059 lots, a decrease of 64,803 lots from the previous day, and the open interest was 916,634 lots, an increase of 7,855 lots. The trading volume of CY2601 was 10,964 lots, a decrease of 1,999 lots, and the open interest was 23,235 lots, an increase of 1,045 lots [1] - **Warehouse Receipt Data**: The number of Zhengzhou cotton warehouse receipts was 2,565, a decrease of 14, and the effective forecast was 286, an increase of 23. The number of cotton yarn warehouse receipts was 6, an increase of 6, and the effective forecast was 0, a decrease of 6 [1] - **Spot Price Data**: The price of Northern Xinjiang 3128 machine - picked cotton was 14,672 yuan/ton, a decrease of 5 yuan from the previous day with a - 0.03% change; the price of Southern Xinjiang 3128 machine - picked cotton was 14,520 yuan/ton, a decrease of 5 yuan with a - 0.03% change; the price in Shandong was 14,793 yuan/ton, an increase of 40 yuan with a 0.27% change; the price in Hebei was 14,756 yuan/ton, an increase of 48 yuan with a 0.33% change. The 3128B index was 14,772 yuan/ton, an increase of 44 yuan with a 0.30% change. The international cotton index M was 72.96 cents/pound, an increase of 1 cent with a 1.09% change. The price of pure - cotton carded yarn 32 was 20,500 yuan/ton, an increase of 30 yuan with a 0.15% change, and the arrival price was 21,213 yuan/ton, an increase of 13 yuan with a 0.06% change [1] - **Spread Data**: The CF1 - 5 spread was - 40 yuan/ton, an increase of 20 yuan from the previous day's spread. The spread between Northern Xinjiang 3128 machine - picked cotton and CF601 was 1,140 yuan/ton, unchanged from the previous day [1] 3.2 Macro and Industry News - **Domestic Cotton Spot**: Cotton spot transactions were mainly for rigid demand, with the spot basis stable but weakening in some areas. The purchase price of machine - picked cottonseed in Xinjiang was still stable and slightly increasing, and different grades of cotton in Xinjiang had different price quotes and sales bases [2] - **Domestic Cotton Textile Enterprises**: The pure - cotton yarn market was divided. The sales of low - count rotor - spun yarn and yarn related to autumn and winter fabrics improved slightly, but overall transactions were average. Some spinning mills tried to raise prices by 100 - 200 yuan/ton, but the actual price - increase space was limited due to insufficient downstream new orders. Market purchases were mainly for rigid demand, and the spinning mills' inventory was generally low [2] - **US Cotton**: The ICE cotton futures fell again, lacking fundamental data guidance and upward momentum [3] 3.3 Trend Intensity - The cotton trend intensity was 0, indicating a neutral trend [5]

Report Summary 1. Report Industry Investment Rating - Not provided in the given content 2. Core View - Cotton continues its rebound momentum [1] 3. Summary by Related Catalogs 3.1 Fundamental Tracking - **Futures Data**: CF2601 closed at 13,465 yuan/ton with a daily increase of 0.97% and a night - session closing price of 13,480 yuan/ton with a 0.11% increase; CY2601 closed at 19,605 yuan/ton with a 0.69% daily increase and a night - session closing price of 19,665 yuan/ton with a 0.31% increase; ICE Cotton 12 was at 64.19 cents/pound with a - 0.16% change. Trading volume and open interest of CF2601 increased, while CY2601's trading volume decreased and open interest increased [1] - **Warehouse Receipt Data**: Zhengzhou cotton's warehouse receipts decreased by 55 to 2,598, and effective forecasts increased by 47 to 230; cotton yarn's warehouse receipts remained at 0, and effective forecasts decreased by 6 to 6 [1] - **Spot Price Data**: Prices of北疆3128机采 and 南疆3128机采 increased by 130 yuan/ton with a 0.90% and 0.91% increase respectively; prices in Shandong increased slightly, while in Hebei decreased slightly. The 3128B index remained unchanged, and the international cotton index M increased by 0.87%. The price of pure - cotton combed yarn 32 - count remained stable, and its arrival price increased slightly [1] - **Spread Data**: The CF1 - 5 spread decreased by 10 to - 65 yuan/ton, and the spread between 北疆3128机采 and CF601 remained unchanged at 1,140 yuan/ton [1] 3.2 Macro and Industry News - **Domestic Cotton Spot**: The domestic cotton spot market had weak trading, with smooth low - price transactions. Spot basis was mostly stable, with some local decreases. The purchase price of Xinjiang machine - picked seed cotton increased [2] - **Domestic Cotton Textile Enterprises**: The pure - cotton yarn market mainly had price - following sales. Market sentiment improved slightly due to the recent increase in Zhengzhou cotton, but downstream enterprises still purchased on a "use - as - needed" basis, with limited new orders. The spinning mill's operating rate increased slightly but was still lower than the same period in previous years, and traders were generally waiting and had weak inventory - building willingness [2] - **US Cotton**: ICE cotton futures rose first and then fell yesterday. Due to the lack of fundamental data guidance, overall trading was light, and the market continued to focus on international economic and trade situations [2] 3.3 Trend Intensity - The cotton trend intensity is 0, indicating a neutral trend [4]

Core Insights - China's cotton industry is experiencing a significant harvest, with expectations for national cotton production to reach a new high since 2013 by 2025 due to favorable weather and effective management practices [1] - Cotton is a crucial economic crop that impacts farmers' income, rural revitalization, and the safety of the downstream textile industry [1] - The cotton industry has undergone market reforms since 1998, leading to a well-developed ecosystem that integrates futures and spot markets, but challenges such as consistency, brand development, and risk management remain [1][2] Industry Overview - Xinjiang accounts for 90% of China's cotton production, with advancements in technology and mechanization leading to yields that are approximately three times the global average [2] - The average length of Xinjiang cotton is 29 millimeters, positioning it competitively in the global market [2] - China's cotton industry demonstrates resilience and vitality, supported by a robust supply chain that connects domestic production with global textile needs [2] Future Development Directions - The future focus of the cotton industry is on quality improvement, with an emphasis on brand development, standardization, and smart agriculture [3] - A new cotton target price policy was introduced in April 2023, prioritizing quality over quantity in cotton production [3] - Establishing a mechanism for quality improvement and linking interests between cotton growers and processing enterprises is essential for enhancing cotton quality [3] - A comprehensive approach involving the entire cotton supply chain is necessary for high-quality development, including research innovation, optimal planting practices, and strong regional branding [3]

Report Industry Investment Rating - Not provided Core View of the Report - The cotton market is in a stalemate this week. Domestically, new cotton acquisition progresses slowly, and the global cotton supply pressure is significant while overseas demand shows no improvement. In the short term, cotton has support below and pressure above. It is recommended to go long with a light position in the short - term and mainly wait and see [3]. Summary by Related Catalogs 01 Market Review US Cotton Weekly Market Review - US cotton fluctuated weakly this week. With the market pre - digesting the Fed's decision to restart interest rate cuts, the weakening dollar boosted a weak rebound in cotton futures. As of the week ending September 26, hedge funds and large speculators held a net short position of 45,420 contracts in cotton, an increase of 2,771 contracts from the previous week. Long positions were 69,367 contracts, a decrease of 751 contracts from the previous week, and short positions were 114,787 contracts, an increase of 2,020 contracts from the previous week [9]. Zhengzhou Cotton Weekly Market Review - Zhengzhou cotton rebounded slightly this week, quoted at 13,210 - 13,380 yuan/ton, with the Friday closing price at 13,335 yuan/ton, a weekly increase of 10 yuan or 0.08%. As of October 17, the registered warehouse receipts of No. 1 cotton were 2,653, and the forecast warehouse receipts were 183, totaling 2,836, equivalent to 119,112 tons [10]. - Since the start of the acquisition this year, the purchase price of seed cotton has shown a trend of first falling and then rising. As of now, the overall average price is lower than the same period last year. Spot trading has temporarily become dull, and textile mills maintain just - in - time procurement [13]. - The spot basis is generally stable and slightly weak, with some batches still offering slight discounts [16]. 02 Domestic Cotton Market Supply - The China Cotton Association predicts that the total cotton output in the 2025/26 season is expected to reach 7.216 million tons, a year - on - year increase of 8.3%, reaching a new high since 2013. The Xinjiang cotton region is particularly prominent, with an expected total output of about 6.911 million tons, a year - on - year increase of 9.2%, accounting for 95.8% of the country's total output [19]. - The listing progress of new cotton is slower than in previous years [21]. Import - In August, China imported 73,000 tons of cotton, a year - on - year decrease of 51.6% and a month - on - month increase of 36.9%. Among the main source countries, Australian new cotton has become the preferred supplementary source in the market, with the import proportion increasing to 77%, and Brazil accounting for 15%. In the 2024/25 season, China's cotton imports decreased, with a total annual import of 1.053 million tons, a year - on - year decrease of 67.5% [27]. Demand - Demand is lower than in previous years. Domestic demand has no obvious positive factors, and exports have slightly improved [29]. - The operating rate has declined compared to before the holiday. Due to the pressure of subsequent order connection, fabric mills mainly wait and see in raw material procurement and purchase according to orders [35]. Profit - This week, the processing profit of ginning mills is 431 - 525 yuan/ton, and the immediate profit of spinning mills is - 695.6 - - 570.1 yuan/ton, showing a decline compared to last week [38]. Inventory - As of the week ending October 17, the national commercial cotton inventory was 1.4334 million tons, a month - on - month increase of 278,000 tons, and 202,800 tons lower than the same period last year. At the end of September, the industrial cotton inventory of cotton textile enterprises was 845,500 tons, a month - on - month decrease of 46,800 tons. During the handover period of the new and old seasons in September, there was a shortage of suitable raw materials, and the demand side did not improve significantly. Textile mills replenished inventory on a just - in - time basis, so the raw material inventory decreased slightly and steadily [44]. 03 International Market Global Cotton Supply and Demand - According to the latest USDA global cotton production and sales forecast in September, the global total cotton output in September was 25.62 million tons, a month - on - month increase of 230,000 tons. China's total output increased by 218,000 tons to 7.076 million tons; total consumption increased by 184,000 tons to 25.68 million tons; and the ending inventory decreased by 168,000 tons to 15.92 million tons [46]. US Cotton Export - Due to the US government shutdown, most USDA reports have suspended disclosure [49]. US Cotton Growth Status - Not provided in detail in the given content.

1. Report Industry Investment Rating No relevant content provided. 2. Core View of the Report - The macro - level Sino - US trade conflict has resurfaced, which is unfavorable for cotton price increases. Fundamentally, the consumption demand during the "Golden September and Silver October" peak season this year is weak, the operating rate of the downstream industrial chain has declined significantly compared to the same period in previous years, and there is an expectation of a bumper harvest in the new domestic cotton season, resulting in high selling hedging pressure. Overall, the fundamental situation of Zhengzhou cotton is weak, and with the impact of macro - level negative factors, it is expected that the upward space for cotton prices in the short term is relatively limited, and the market may continue to fluctuate weakly [9]. 3. Summary by Directory 3.1 Week - on - Week Assessment and Strategy Recommendation - **Market Review**: In the overseas market, the price of US cotton futures fluctuated this week. As of Friday, the closing price of the December contract of US cotton futures was 64.29 cents per pound, up 0.52 cents per pound from the previous week, a rise of 0.82%. The spread between the December and March contracts of US cotton fluctuated, reported at - 1.5 cents per pound, up 0.23 cents per pound from the previous week. In the domestic market, the price of Zhengzhou cotton fluctuated narrowly this week. As of Friday, the closing price of the January contract of Zhengzhou cotton was 13,335 yuan per ton, up 10 yuan per ton from the previous week, a rise of 0.08%. The China Cotton Price Index (CCIndex) 3128B was reported at 14,679 yuan per ton, down 78 yuan per ton from the previous week. The basis weakened, reported at 1,328 yuan per ton, down 96 yuan per ton from the previous week. The spread between the January and May contracts of Zhengzhou cotton weakened slightly, reported at - 55 yuan per ton, down 5 yuan per ton from the previous week [9]. - **Industry Information**: In the overseas market, due to the US government shutdown, USDA data continued to be suspended. In the domestic market, according to market news, on October 16, the machine - picked cotton purchase index in Xinjiang was 6.17 yuan per kilogram, up 0.02 yuan per kilogram from the previous week. Machine - picked cotton in southern Xinjiang started large - scale picking, and the purchase price of machine - picked cotton increased. According to the latest data released by Mysteel, as of the week of October 17, the operating rate of spinning mills was 65.6%, up 0.2% week - on - week, down 7.6 percentage points from the same period last year, and down 10.22 percentage points from the average of the past five years (75.82%) [9]. - **Viewpoint and Strategy**: As mentioned in the core view, the upward space for short - term cotton prices is limited, and the market may continue to fluctuate weakly [9]. 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, spreads between different months of Zhengzhou cotton, and spreads between different regions and different varieties in the international market, such as the US - Brazil spread, etc. These charts show the historical trends of various spreads from 2021 to 2025 [24][26][28]. 3.3 Domestic Market Situation - **Cotton Production**: The report shows the processing and inspection volume of Chinese cotton and the purchase price of Xinjiang seed cotton through charts, reflecting the production situation of domestic cotton [38][39]. - **Import Volume**: Charts show the monthly and annual cumulative import volumes of Chinese cotton, the import volume of US cotton to China, and the import volume of cotton yarn, reflecting the import situation of the domestic cotton market [40][41][45]. - **Downstream Operating Rate**: The operating rates of spinning mills and weaving mills are presented through charts, showing the operating conditions of the downstream industry [48][49]. - **Sales Progress**: The national cotton sales progress and the daily trading volume of the Light Textile City are shown through charts, reflecting the sales situation of domestic cotton [50][51]. - **Inventory**: The weekly commercial inventory of Chinese cotton, the combined monthly inventory of commercial and industrial cotton, as well as the raw material and finished - product inventories of spinning mills are presented through charts, reflecting the inventory situation of the domestic cotton market [53][54][55]. 3.4 International Market Situation - **US Situation**: The report shows the planting area without drought, the excellent - good rate, production, output, planting area, export signing progress, export shipment volume, supply surplus/shortage, and inventory - consumption ratio of US cotton through various charts, comprehensively reflecting the situation of the US cotton market [59][60][61]. - **Brazilian Situation**: Charts show the planting area, output, export volume, supply surplus/shortage, and inventory - consumption ratio of Brazilian cotton, reflecting the situation of the Brazilian cotton market [72][73][75]. - **Indian Situation**: The planting area, output, consumption, and import - export volume, as well as supply surplus/shortage and inventory - consumption ratio of Indian cotton are presented through charts, showing the situation of the Indian cotton market [80][81][83].