1. Report Industry Investment Rating - Not provided in the content. 2. Core View of the Report - The fundamentals of cotton remain strong with upward potential in the long - term due to factors like the expected reduction in Xinjiang's cotton planting area, fast sales progress, improved Sino - US relations, and the expected expansion of Xinjiang textile mills' production capacity. However, there may be short - term回调 risks as cotton prices rose rapidly on Friday [6][7]. - The US cotton is expected to trade in a range, while Zhengzhou cotton is expected to be bullish with short - term回调 risks. For trading strategies, it is recommended to take a wait - and - see approach for arbitrage and options [8][9][10]. - The cotton yarn market is expected to回调 in the short - term due to weak downstream demand and sufficient supply. The trading in the pure cotton yarn market is light, and the full - cotton grey fabric market has weak sales [10]. 3. Summary by Relevant Catalogs First Part: Market Information - **Futures Market**: The prices of CF01, CF05, and CF09 contracts decreased by 95, 100, and 100 respectively; CY01, CY05, and CY09 contracts decreased by 350, 95, and 160 respectively. The trading volume and open interest of most contracts decreased [2]. - **Spot Market**: CCIndex3128B increased by 262 to 15541 yuan/ton, Cot A remained at 74.20 cents/pound, and the prices of some other varieties had different changes [2]. - **Spread**: In the cotton and cotton yarn inter - period spreads, the spreads and their changes varied; in the inter - variety spreads, the spreads and their changes also showed different trends [2]. Second Part: Market News and Views Cotton Market News - **US Retail and Inventory Data**: In October 2025, the US clothing and apparel retail sales reached $27.128 billion, a year - on - year increase of 5.72% and a month - on - month increase of 0.87%. From January to October 2025, the cumulative retail sales reached $264.202 billion, a year - on - year increase of 5.34%. In September 2025, the US clothing and apparel retailer inventory was $58.488 billion, a year - on - year decrease of 0.39% and a month - on - month increase of 0.48%. In September 2025, the inventory - to - sales ratio was 2.17, a year - on - year decrease of 0.15 and a month - on - month increase of 0.03 [4]. - **Zhangjiagang Cotton Inventory**: As of December 22, 2025, the total cotton inventory in Zhangjiagang Free Trade Zone was 34,100 tons, a year - on - year decrease of 0.39%. The proportion of cotton from different countries changed. The inventory had a net increase, and it is expected that Brazilian cotton will continue to increase, while Australian cotton will mainly be out of storage [5]. - **National Cotton Inspection**: As of December 28, 1088 cotton processing enterprises nationwide had conducted notarized inspections, with a total inspection weight of 6.204 million tons. Among them, 1013 enterprises in Xinjiang had an inspection weight of 6.131 million tons, and 75 enterprises in the inland had an inspection weight of 73,000 tons [5]. Trading Logic - The expected reduction in Xinjiang's cotton planting area, fast sales progress, improved Sino - US relations, and the expected expansion of Xinjiang textile mills' production capacity support the fundamentals of cotton. China's recent signing of US cotton contracts also provides upward momentum for US cotton. The cotton price has an obvious upward trend, but there may be short - term回调 risks [6][7]. Trading Strategies - **Single - side Trading**: US cotton is expected to trade in a range, and Zhengzhou cotton is expected to be bullish with short - term回调 risks [8]. - **Arbitrage**: Wait - and - see [9]. - **Options**: Wait - and - see [10]. Cotton Yarn Industry News - The Zhengzhou cotton futures are at a high level but are expected to回调 in the short - term due to weak downstream demand and sufficient supply. The trading in the pure cotton yarn market is light, and only medium - and high - count yarns are performing well. The full - cotton grey fabric market has weak sales, and small and medium - sized weaving mills are expected to have holidays during the New Year's Day [10]. Third Part: Options - **Option Contract Data**: The report provides data on option contracts such as CF601C13400.CZC, CF601P13000.CZC, and CF601P12400.CZC, including closing prices, price changes, implied volatility, and other indicators [12]. - **Volatility**: The 10 - day HV of cotton increased slightly compared to the previous day. The implied volatilities of different option contracts were 6.7%, 11.4%, and 17.8% respectively [12]. - **Option Strategy**: Wait - and - see [14]. Fourth Part: Relevant Attachments - The report provides multiple charts, including the 1% tariff - based domestic and international cotton price spread, cotton 1 - month, 5 - month, and 9 - month basis, CY05 - CF05 and CY01 - CF01 spreads, and CF9 - 1 and CF5 - 9 spreads [16][19][23][24].

1. Report's Industry Investment Rating - No information provided 2. Core Viewpoints of the Report - The domestic cotton market has a sufficient supply as the current inspection volume of new - cotton has exceeded 4.6 million tons and port cotton stocks remain high. The import quota for this year is almost used up, with limited RMB exports and more imports than exports at ports. As of December 4th, the inventory at major import cotton ports increased by 1.92% week - on - week, reaching a total of 387,600 tons, a five - month high. The downstream demand is relatively differentiated, with the demand for high - count yarn improving, which boosts the cotton market. Overall, the demand margin is improving and the price center may continue to rise [2] 3. Summary by Relevant Catalogs 3.1 Futures Market - Zhengzhou cotton's main contract closing price was 13,860 yuan/ton, up 80 yuan; cotton yarn's main contract closing price was 20,005 yuan/ton, up 40 yuan. The net position of the top 20 in cotton futures was - 155,603 lots, down 19,526 lots; for cotton yarn futures, it was - 506 lots, down 256 lots. The main contract holding volume for cotton was 443,647 lots, down 30,671 lots; for cotton yarn, it was 20,500 lots, up 2,442 lots. The cotton warehouse receipt quantity was 2,967 sheets, down 3 sheets; for cotton yarn, it was 12 sheets, unchanged. The China Cotton Price Index: CCIndex: 3128B was 15,013 yuan/ton; the China Yarn Price Index for pure - cotton carded 32 - count yarn was 20,800 yuan/ton [2] 3.2 Spot Market - The 1% tariff - included China Imported Cotton Price Index: FCIndexM was 12,846 yuan/ton, up 34 yuan; the sliding - duty price was 13,873 yuan/ton. The arrival price of imported pure - cotton carded 32 - count yarn was 21,038 yuan/ton, up 2 yuan; for pure - cotton combed 32 - count yarn, it was 22,211 yuan/ton, up 2 yuan [2] 3.3 Upstream Situation - The national cotton sowing area was 2,838.3 thousand hectares; the national cotton output was 6.16 million tons [2] 3.4 Industry Situation - The cotton - yarn price difference (CY C32S - CC3128B) was 5,787 yuan/ton, down 9 yuan. The national industrial inventory of cotton was 850,000 tons, up 65,000 tons. The monthly import volume of cotton was 90,000 tons, down 10,000 tons; for cotton yarn, it was 140,000 tons, up 10,000 tons. The daily profit from importing cotton was 1,131 yuan/ton, down 7 yuan. The national commercial inventory of cotton was 2.9306 million tons, up 1.9089 million tons [2] 3.5 Downstream Situation - The inventory days of yarn was 26.12 days, up 1.27 days; for grey cloth, it was 31.97 days, up 0.85 days. The monthly output of cloth was 2.62 billion meters, down 180 million meters; for yarn, it was 2.001 million tons, down 73,000 tons. The monthly export value of clothing and clothing accessories was 110,034,804,300 dollars, down 14,497,665,700 dollars; for textile yarns, fabrics and products, it was 112,584,189,200 dollars, down 7,080,970,800 dollars [2] 3.6 Option Market - The implied volatility of at - the - money call options for cotton was 13.96%, up 2.38%; for at - the - money put options, it was also 13.96%, up 2.38%. The 20 - day historical volatility of cotton was 5.6%, down 0.15%; the 60 - day historical volatility was 6.42%, down 0.01% [2] 3.7 Industry News - From December 1st to 7th, the average purchase price of machine - picked cotton in Xinjiang was 5.99 yuan/kg, down 0.03 yuan/kg from the previous week and 0.13 yuan/kg year - on - year. The average purchase price of hand - picked cotton was 6.6 yuan/kg, down 0.03 yuan/kg from the previous week and up 0.02 yuan/kg year - on - year. The average purchase price of seed cotton in the inland was relatively stable at 6.86 yuan/kg, the same as the previous week. The Intercontinental Exchange (ICE) cotton futures closed higher on Wednesday, with the March cotton futures contract up 0.26 cents, or 0.41%, at 64.12 cents per pound [2]

Report Summary 1. Report Industry Investment Rating No information provided. 2. Core Viewpoints - The domestic cotton market has sufficient supply as the inspection volume of new cotton has exceeded 4.6 million tons and port cotton stocks remain high. The import quota for this year is almost used up, and the export volume of RMB is limited, resulting in more imports than exports at cotton ports. The inventory at major import cotton ports has reached a five - month high. - The downstream demand is relatively differentiated. The demand for high - count yarn has improved, which boosts the cotton market to some extent. Overall, although there is a marginal improvement in demand, the supply is still abundant, limiting the rebound of cotton prices. Attention should be paid to new driving factors in the later stage. [2] 3. Summary by Relevant Catalogs Futures Market - Zhengzhou cotton main contract closing price is 13,750 yuan/ton (unchanged), and cotton yarn main contract closing price is 19,980 yuan/ton (down 25 yuan/ton). - Cotton futures top 20 net positions are - 130,475 hands (up 300 hands), and cotton yarn futures top 20 net positions are - 318 hands (up 39 hands). - Cotton main contract positions are 489,062 hands (down 8,717 hands), and cotton yarn main contract positions are 16,063 hands (up 745 hands). - Cotton warehouse receipts are 2,753 sheets (up 44 sheets), and cotton yarn warehouse receipts are 13 sheets (up 1 sheet). - China Cotton Price Index (CCIndex:3128B) is 15,009 yuan/ton (down 13 yuan/ton), and China Yarn Price Index (pure cotton carded yarn 32 - count) is 20,800 yuan/ton (up 30 yuan/ton). [2] 现货市场 - China's imported cotton price index (FCIndexM:1% tariff) is 12,853 yuan/ton (down 67 yuan/ton), and the arrival price of imported cotton yarn price index (pure cotton carded yarn 32 - count) is 21,053 yuan/ton (up 74 yuan/ton). - China's imported cotton price index (FCIndexM: sliding - duty tax) is 13,880 yuan/ton (down 48 yuan/ton), and the arrival price of imported cotton yarn price index (pure cotton combed yarn 32 - count) is 22,227 yuan/ton (down 9 yuan/ton). [2] Upstream Situation - The national cotton sown area is 2,838.3 thousand hectares (up 48.3 thousand hectares), and the national cotton output is 6.16 million tons (up 0.54 million tons). [2] Industrial Situation - The cotton - yarn price difference is 5,791 yuan/ton (up 43 yuan/ton), and the national industrial inventory of cotton is 850,000 tons (up 65,000 tons). - The monthly import volume of cotton is 90,000 tons (down 10,000 tons), and the monthly import volume of cotton yarn is 140,000 tons (up 10,000 tons). - The daily profit of imported cotton is 1,142 yuan/ton (up 72 yuan/ton), and the national commercial inventory of cotton is 2.9306 million tons (up 1.9089 million tons). [2] Downstream Situation - The inventory days of yarn are 26.12 days (up 1.27 days), and the inventory days of grey cloth are 31.97 days (up 0.85 days). - The monthly output of cloth is 2.62 billion meters (down 0.18 billion meters), and the monthly output of yarn is 2.001 million tons (down 0.073 million tons). - The monthly export value of clothing and clothing accessories is 110,034,804,300 US dollars (down 14,497,665,700 US dollars), and the monthly export value of textile yarns, fabrics and products is 112,584,189,200 US dollars (down 7,080,970,800 US dollars). [2] Option Market - The implied volatility of cotton at - the - money call options is 7.42% (down 4.92%), and the implied volatility of cotton at - the - money put options is 7.42% (down 4.92%). - The 20 - day historical volatility of cotton is 5.78% (up 0.07%), and the 60 - day historical volatility of cotton is 6.64% (up 0.01%). [2] Industry News - The national commercial inventory of cotton is increasing. As of December 5, 2025, the total commercial inventory of cotton is 4.465 million tons, a week - on - week increase of 285,600 tons (a 6.83% increase). Among them, the commercial inventory of cotton in Xinjiang is 3.8859 million tons, a week - on - week increase of 269,500 tons (a 7.45% increase), and the commercial inventory of cotton in the inland area is 191,500 tons, a week - on - week increase of 8,800 tons (a 4.82% increase). - According to the USDA report, from October 17 - 23, 2025, the net export signing volume of US upland cotton for the 2025/26 season is 30,100 tons, a 24.4% decrease from the previous week and a 22.9% decrease from the average of the previous four weeks. The shipment volume of US upland cotton for the 2025/26 season is 39,600 tons, a 9.4% increase from the previous week and a 21.5% increase from the average of the previous four weeks. [2]

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]