Report Summary 1. Investment Rating - No investment rating for the industry is provided in the report. 2. Core View - In the domestic market, the supply side shows that in mid - October 2025, the new cotton picking and selling progress in Xinjiang is faster than last year, but recent cold and snowy weather will slow down the picking. The new cotton price is around 6.2 yuan/kg, and the cost is still supported. The demand side indicates that the spinning mills' operating rate is low, and the peak season is weak, so the restocking enthusiasm is expected to be low. Overall, the large - scale acquisition and processing of new - season cotton bring significant hedging demand, with upward pressure and cost - based support below. Short - term cotton prices are expected to fluctuate [2]. 3. Summary by Directory 3.1 Futures Market - Zhengzhou cotton main contract closed at 13,575 yuan/ton, up 40 yuan; cotton yarn main contract closed at 19,820 yuan/ton, up 60 yuan. - Cotton futures' top 20 net positions were - 117,362 lots, down 10,259 lots; cotton yarn futures' top 20 net positions were - 139 lots, down 59 lots. - Cotton main contract positions were 599,556 lots, up 6,744 lots; cotton yarn main contract positions were 23,684 lots, up 449 lots. - Cotton warehouse receipts were 2,526 lots, down 39 lots; cotton yarn warehouse receipts were 6 lots, unchanged [2]. 3.2 Spot Market - China's cotton price index (CCIndex:3128B) was 14,784 yuan/ton, up 12 yuan; China's imported cotton price index (FCIndexM:1% tariff) was 13,106 yuan/ton, up 54 yuan. - China's yarn price index for pure - cotton carded 32 - count yarn was 20,500 yuan/ton, unchanged; the arrival price of imported pure - cotton carded 32 - count yarn was 21,213 yuan/ton, up 13 yuan [2]. 3.3 Upstream Situation - The national cotton sowing area was 2,838.3 thousand hectares, up 48.3 thousand hectares; the national cotton output was 6.16 million tons, up 540,000 tons. - The cotton - yarn price difference was 5,716 yuan/ton, down 12 yuan; the national industrial cotton inventory was 861,000 tons, down 9,000 tons [2]. 3.4 Industry Situation - Cotton imports were 100,000 tons, up 30,000 tons; cotton yarn imports were 130,000 tons, unchanged. - The profit from imported cotton was 733 yuan/ton, up 12 yuan; the national commercial cotton inventory was 1.0217 million tons, down 460,000 tons [2]. 3.5 Downstream Situation - The yarn inventory days were 26.58 days, down 0.65 days; the grey fabric inventory days were 33.87 days, down 1.31 days. - The monthly cloth output was 2.701 billion meters, up 0.01 billion meters; the monthly yarn output was 2.0279 million tons, up 36,400 tons. - The monthly export value of clothing and clothing accessories was 14,145,904,000 US dollars, down 1,015,855,000 US dollars; the monthly export value of textile yarns, fabrics and products was 12,393,202,000 US dollars, up 789,193,000 US dollars [2]. 3.6 Option Market - The implied volatility of cotton at - the - money call options was 8.07%, down 1.26%; the implied volatility of cotton at - the - money put options was 8.07%, down 1.22%. - The 20 - day historical volatility of cotton was 8.57%, down 0.02%; the 60 - day historical volatility of cotton was 7.98%, down 0.03% [2]. 3.7 Industry News - As of October 21, 2025, the cumulative notarized inspection of cotton in the 2025/26 season was 4,331,712 bales, totaling 978,606 tons, a year - on - year increase of 84.07%. The cumulative notarized inspection of Xinjiang cotton was 961,248 tons, a year - on - year increase of 85.69%. - ICE cotton futures fell on Wednesday due to the ongoing US government shutdown, which delayed the release of USDA reports and left the market without clear trading guidance. The December ICE cotton futures contract closed down 0.68 cents, or 1.06%, at 63.74 cents per pound [2].

Group 1: Report Core Data - On August 20, the domestic cotton futures CF01 was 14,055, down 45 or -0.32% from the previous day; CF09 was 13,800, down 20 or -0.14% [3] - The domestic cotton spot price in Xinjiang remained unchanged at 15,080; in Henan, it was 15,304, up 4 or 0.03%; in Shandong, it was 15,238, down 5 or -0.03% [3] - The domestic棉纱 futures CY was 20,065, down 80 or -0.40% from the previous day; the domestic棉纱 spot C32S price index remained unchanged at 20,700 [3] - The US cotton spot CT was 67.53 USD/pound, unchanged; the arrival price was 77.20, down 0.3 or -0.39%; the 1% quota pick - up price was 13,602, down 52 or -0.38%; the sliding - scale duty pick - up price was 14,358, down 29 or -0.20% [3] - The yarn - cotton spread (futures) was 6,010, down 35; the yarn - cotton spread (现货) was 756, up 23 [3] - The domestic - foreign spread (现货) was 1,589, down 47 from the previous day [4] Group 2: Core View - Under the expectation of a new crop's high yield and the reality of old - crop inventory shortage, the pattern of near - term strength and long - term weakness is prominent [4] - From late July to early August is the window period for multiple policies and industry events. The content of domestic policy - related meetings, the progress of Sino - US trade negotiations, the implementation of new cotton high - yield, whether the import sliding - scale duty quota is increased and the increase amount have a significant impact on the Zhengzhou cotton expectation. Among them, the situation of increasing the import sliding - scale duty quota has a greater impact on the old - crop supply - demand and near - term contracts [4]