Group 1: Report Industry Investment Rating - No relevant content provided Group 2: Report's Core View - Short - term cotton drivers are limited, but the medium - and long - term cotton fundamentals remain strong. After a significant recent price correction, cotton is expected to trade in a range in the short term. The short - term trend of US cotton and Zhengzhou cotton is likely to be range - bound. For cotton trading strategies, it is recommended to take a wait - and - see approach for arbitrage and options. The cotton yarn market will continue to be weak in the short term, and the overall situation of the cotton fabric market has not changed significantly [6][8][9][10] Group 3: Summary by Directory First Part: Market Information - **Futures Market**: The closing prices, price changes, trading volumes, and open interest of various cotton (CF) and cotton yarn (CY) futures contracts are presented. For example, the CF01 contract closed at 15300 with a price increase of 145, and the CY05 contract closed at 20620 with a price increase of 105 [2] - **Spot Market**: The prices and price changes of various cotton and cotton yarn spot varieties are provided, such as the CCIndex3128B cotton price at 15839 yuan/ton with a decrease of 17, and the CY IndexC32S cotton yarn price at 21320 with no change [2] - **Price Spreads**: Different price spreads, including cotton inter - month spreads, cotton yarn inter - month spreads, cross - variety spreads, and internal - external spreads, are given. For instance, the 1 - 5 month cotton spread is 570 with a decrease of 50, and the internal - external cotton spread (1% tariff) is 2827 with an increase of 63 [2] Second Part: Market News and Views Cotton Market News - **West African Cotton**: In the 2025/26 season, the cotton planting area in West Africa is expected to be about 2.2 million hectares (about 33 million mu), a 6% year - on - year decrease. Mali's seed cotton production will drop by over one - third to about 435,000 tons, while Benin's total production is expected to increase by 2% to about 650,000 tons. The total production of the eight West African countries is expected to be 905,000 tons, a 6% year - on - year decrease [4] - **Pakistani Textiles**: In December 2025, Pakistan's textile exports were $1.11 billion, a 6% month - on - month and 8% year - on - year decrease. In the first six months of the 2025/26 fiscal year, the cumulative total textile exports were $7.6 billion, a 1% year - on - year slight increase [5] - **Xinjiang Cotton Transportation**: On January 22, 2026, the road transportation price index of Xinjiang - outbound cotton was 0.1665 yuan/ton·km, a 0.77% month - on - month decrease. It is expected to show a narrow - range oscillation in the short term [5] Trading Logic and Strategies - **Logic**: The current cotton sales progress is fast, and downstream stocking willingness has increased. Short - term cotton drivers are limited, and the medium - and long - term fundamentals are strong. After a significant price correction, short - term range - bound trading is expected [6] - **Strategies**: For single - side trading, the short - term trends of US cotton and Zhengzhou cotton are likely to be range - bound. For arbitrage and options, a wait - and - see approach is recommended [8][9][10] Cotton Yarn Industry News - **Cotton Yarn Market**: The domestic cotton yarn market has been weak, with continuous price discounts. The trading volume is expected to decrease further. The prices of different cotton yarn products in various regions are provided [10] - **Cotton Fabric Market**: The overall situation of the cotton fabric market has not changed significantly, with slightly better sales of thinner plain - weave fabrics. Weaving mills' orders have increased slightly, but the delivery time is tight. They are cautious about the post - holiday market [10] Third Part: Options - **Option Data**: The closing prices, price changes, implied volatilities, and other relevant data of several cotton option contracts on January 19, 2026 are presented. For example, the CF605C14600.CZC option closed at 334 with a 16.9% decrease, and its implied volatility was 13.3% [12] - **Volatility Analysis**: The 60 - day historical volatility (HV) of cotton increased slightly compared to the previous day. The implied volatilities of different option contracts are also provided [12] - **Option Strategy**: A wait - and - see approach is recommended for options [14] Fourth Part: Related Attachments - Multiple figures are presented, including the internal - external cotton price difference under 1% tariff, cotton basis for different months, the price difference between cotton yarn and cotton futures contracts, and the inter - month price difference of cotton futures contracts [16][19][23][24]

Group 1: Report Industry Investment Rating - No relevant content provided Group 2: Core View of the Report - Cotton sales progress is fast, at a high level compared to the same period in previous years, and downstream备货意愿 has increased, with textile mills starting to place orders gradually. The cotton price is supported by market bullish factors, but it has recently pulled back, and is expected to fluctuate in the short term. For trading strategies, it is recommended to consider building long positions on Zhengzhou cotton at low prices while keeping a wait - and - see attitude for arbitrage and options [8][9] Group 3: Summary by Directory First Part: Market Information - **Futures Market**: CF01 contract closed at 15140 with an increase of 465, CF05 at 14545 with a decrease of 45, and CF09 at 14710 with a decrease of 35. CY01 was at 0 with a decrease of 20250, CY05 at 20570 with a decrease of 45, and CY09 at 0 with a decrease of 20675. Details of trading volume, open interest, and their changes are also provided [2] - **Spot Market**: CCIndex3128B was at 15880 yuan/ton with a decrease of 92, Cot A at 74.80 cents/pound, FC Index:M: to - port price at 72.29 with a decrease of 0.30, etc. [2] - **Price Spread**: In cotton inter - period spreads, the 1 - 5 month spread was 595 with an increase of 510, 5 - 9 month spread was - 165 with a decrease of 10, etc. In yarn inter - period spreads, the 1 - 5 month spread was - 20570 with a decrease of 20205, etc. [2] Second Part: Market News and Views Cotton Market News - **Brazil**: In the 2025/26 season, Brazil is expected to remain dominant in the global cotton market. The total cotton output may decline slightly from the previous record - high year but will still be the second - highest in history. The planting area is expected to increase slightly by 0.7% to 2.1 million hectares, the yield per unit area is expected to decrease by 3.5%, and the total output will be 3.96 million tons, a year - on - year decrease of 2.9%. The domestic available supply is expected to be 6.77 million tons, an increase of 4.5%. Exports are expected to reach 3.06 million tons, a year - on - year increase of 3.98%, and domestic consumption is estimated to be 730,000 tons. As of December 2026, the ending inventory is expected to be 2.98 million tons, an increase of 6.07% compared to December 2025. As of January 6, the contract trading volume of 2025/26 cotton reached 621,520 tons, equivalent to 16% of the estimated national total output, and the pre - sales volume of 2026/27 cotton has reached at least 73,000 tons [4][5] - **USA**: As of the week of January 16, 2026, the cumulative inspection volume of U.S. upland cotton + Pima cotton was 2.7896 million tons, accounting for 94.6% of the estimated annual U.S. cotton output, 8% slower year - on - year. The inspection progress of upland cotton was 94.7%, a year - on - year decrease of 8%, and that of Pima cotton was 90.5%, 19% slower year - on - year. The weekly deliverable ratio was 75.4%, and the quarterly deliverable ratio was 82.1%, 1.3 percentage points higher year - on - year [5] - **China**: On January 19, 2026, the road transportation price index of Xinjiang - bound cotton was 0.1679 yuan/ton·km, a month - on - month increase of 0.66%. It is expected to show a narrow - range overall fluctuation in the short term [6] Trading Logic - The cotton sales progress is fast, and downstream备货意愿 has increased. The cotton price is supported by market bullish factors, but it has recently pulled back, and is expected to fluctuate in the short term [8] Trading Strategy - **Single - side**: It is expected that the U.S. cotton will mostly fluctuate within a range in the short term, and the fundamentals of Zhengzhou cotton are still strong. It is recommended to consider building long positions at low prices. - **Arbitrage**: Wait - and - see. - **Options**: Wait - and - see [9] Cotton Yarn Industry News - **Domestic Market**: The domestic cotton yarn market remains sluggish, with prices generally stable but weak market sentiment. Spinning mills are mainly focused on active sales and inventory digestion. Some spinning enterprises have received downstream restocking orders, but the scale and enthusiasm are lower than in previous years. Most spinning enterprises still face the pressure of insufficient orders. Downstream rigid - demand purchases are mainly for sporadic restocking, and the overall stocking intention is not strong [9] - **Fabric Market**: Cotton fabric traders are cautious in stocking, with general purchase and order - placing volumes, mainly small - batch orders. The orders of weaving factories are average, and although the local operating rate has slightly recovered, the overall operating rate is still at a low level. It is expected that some weaving factories will gradually start their holidays at the end of the month. The inventory of weaving factories is still at a high level, and they prioritize inventory reduction to recover funds [10] Third Part: Options - **Option Contracts**: For example, on January 19, 2026, the CF605C14600.CZC contract had a closing price of 334.00 with a decrease of 16.9%, an implied volatility of 13.3%, etc. - **Volatility**: The 60 - day HV of cotton yesterday was 9.2812, with a slight increase in volatility compared to the previous day. The implied volatility of CF605 - C - 14600 was 13.3%, CF605 - C - 14200 was 11.3%, and CF605 - P - 13800 was 11.2%. - **Option Strategy**: The PCR of the main Zhengzhou cotton contract's open interest was 0.8667, and the PCR of the main contract's trading volume was 0.4688. The trading volumes of both call and put options decreased today. It is recommended to wait and see [12][13][15] Fourth Part: Relevant Attachments - The report provides figures such as the 1% tariff - based price spread between domestic and foreign cotton markets, cotton 1 - month, 5 - month, and 9 - month basis, CY05 - CF05 and CY01 - CF01 spreads, and CF9 - 1 and CF5 - 9 spreads [18][22][26][27]

Report Summary 1) Report Industry Investment Rating No relevant content provided. 2) Core View of the Report The demand will still limit the rebound momentum of Zhengzhou cotton futures [1]. 3) Summary according to Relevant Catalogs [Fundamental Tracking] - **Futures Data**: CF2509 closed at 12,990 yuan/ton yesterday with no daily increase, and 13,005 yuan/ton in the night session with a 0.12% increase. CY2507 closed at 18,935 yuan/ton yesterday with a -0.21% decrease, and 18,955 yuan/ton in the night session with a 0.11% increase. ICE cotton 07 closed at 68.7 cents/pound yesterday with a -0.65% decrease [1]. - **Trading Volume and Open Interest**: The trading volume of CF2509 was 254,032 lots yesterday, a decrease of 2,112 lots from the previous day, and the open interest was 773,192 lots, a decrease of 7,911 lots. The trading volume of CY2507 was 4,278 lots yesterday, a decrease of 1,999 lots, and the open interest was 22,233 lots, an increase of 1,045 lots [1]. - **Warehouse Receipts**: The number of Zhengzhou cotton warehouse receipts was 10,555 yesterday, an increase of 216, and the effective forecast was 1,938, a decrease of 239. The number of cotton yarn warehouse receipts was 10, unchanged, and the effective forecast was 0, an increase of 10 [1]. - **Spot Prices**: The price of Northern Xinjiang 3128 machine - picked cotton was 14,068 yuan/ton, unchanged from the previous day. The price of Southern Xinjiang 3128 machine - picked cotton was 13,870 yuan/ton, unchanged. The price in Shandong was 14,285 yuan/ton, an increase of 17 yuan or 0.12%. The price in Hebei was 14,241 yuan/ton, an increase of 17 yuan or 0.12%. The 3128B index was 14,224 yuan/ton, an increase of 36 yuan or 0.25% [1]. - **Price Spreads**: The CF9 - 1 spread was - 235 yuan/ton, an increase of 5 yuan from the previous day. The spread between Northern Xinjiang 3128 machine - picked cotton and CF509 was 1,080 yuan/ton, unchanged [1]. [Macro and Industry News] - **Domestic Cotton Spot**: Cotton spot trading remained sluggish, market quotations decreased slightly, and the quoted prices in different regions varied greatly. The spot sales basis was stable. The sales basis of 2024/25 Southern Xinjiang machine - picked 3129/29 - 30B with impurities within 3 was mainly CF09 + 750 - 800, and some were as high as 900 - 1000, for self - pickup in Xinjiang. The basis of some transactions of 2024/25 Agricultural Division 8 machine - picked 4129/29B with impurities within 3.5 was around CF09 + 1200, for self - pickup in Xinjiang. The freight for cotton transported out of Xinjiang by truck was basically stable [2]. - **Domestic Cotton Textile Enterprises**: The trading volume in the pure cotton yarn market was poor, downstream orders were insufficient, and procurement decreased. Spinning mills' operating rates declined, and the number of holidays increased recently. The price of cotton yarn gradually decreased. The weakness of pure cotton grey fabric continued recently, the shipment slowed down significantly, and the shipment volume declined. Weaving mills purchased based on sales, and their procurement enthusiasm was not high. New orders for weaving mills were insufficient, and the production of conventional varieties increased [2]. - **US Cotton**: Last Friday, ICE cotton first rose and then fell. Driven by technical buying in the Asian trading session, ICE cotton once reached 69.75 cents/pound. However, due to poor US cotton export data and favorable weather in the main producing areas, and the lack of fundamental drivers, ICE cotton finally closed at 68.7 cents/pound [3]. [Trend Intensity] The trend intensity of cotton is 0, indicating a neutral trend [5].