Core Viewpoint - The recent rapid increase in Zheng cotton prices, rising from 13,500 yuan/ton to 15,000 yuan/ton, has drawn significant market attention, while U.S. cotton prices remain low and stable, leading to an expanding price gap between domestic and international cotton [1] Group 1: Zheng Cotton Price Dynamics - Zheng cotton prices have risen due to cotton purchase prices stabilizing near planting costs and a tight supply-demand balance in the new season, especially with import restrictions in place [1] - The anticipated high production of 7.5 million tons for the 2025/26 season is gradually being absorbed by the market, contributing to the bullish sentiment for Zheng cotton [1] - Potential adjustments to cotton planting policies in 2026 may lead to reduced planting areas, which could further support prices in a market already facing supply shortages [2] Group 2: External Factors Influencing Cotton Prices - Unexpected weather events may significantly impact Zheng cotton prices, potentially more than policy changes, although weather effects are uncertain and typically short-term [2] - U.S. cotton export contracts and shipments are currently low, with Southeast Asia showing consistent purchasing, while exports to China are at historical lows [2] - Brazil's cotton exports are strong due to cost advantages, and this trend is expected to continue until March 2026, which may suppress U.S. cotton prices [2] Group 3: Market Dynamics and Future Outlook - The expanding price gap between domestic and international cotton may lead to increased imports, particularly if imported cotton offers better value, potentially narrowing the price gap [3] - Downstream inventory accumulation may temporarily limit the upward movement of Zheng cotton prices [3] - The current high historical level of the domestic-international cotton price gap suggests a potential for price correction in the future, with traders advised to monitor U.S. cotton sales progress and the impact of imports on the market [3]

Report Title - Cotton Weekly Report: Sales Remain Stable, Cotton Prices Fluctuate with an Uptrend [1] Report Industry Investment Rating - Not provided in the document Core Viewpoints - The international cotton market, especially the US cotton market, is expected to continue trading within a range due to limited fundamental contradictions. The domestic cotton market is expected to see cotton prices continue to fluctuate with an upward bias due to better - than - normal new cotton sales in the short term and stable downstream demand [8][29] Summary by Directory Part I: International and Domestic Market Analysis International Market Analysis - **US Cotton Market**: The fundamental contradictions are not significant, and the US cotton is expected to continue trading within a range. As of December 12, 2025, the cumulative inspection volume of US upland cotton + Pima cotton was 2.225 million tons, accounting for 72.5% of the annual US cotton production forecast, 10% slower than the same period last year. The weekly and quarterly deliverable ratios are rising. The sales volume of US upland cotton decreased week - on - week, and the shipment volume increased slightly [8] - **Brazil**: As of December 13, the cotton planting in the 2025/26 season was 10.1% complete, 4.8 percentage points higher than the previous period but 2.1 percentage points slower than the same period last year. The planting progress in the early stage was slower due to the late harvest of soybeans in some areas [8] - **India**: The CAI's latest report shows that compared with the previous month, the production, import, and export of Indian cotton in the 2025/26 season have been adjusted, and the domestic demand has been reduced, resulting in a 230,000 - ton increase in ending stocks [8] - **Global**: According to the latest USDA forecast in December, the global cotton production decreased by 64,000 tons to 26.08 million tons, consumption decreased by 60,000 tons to 25.82 million tons, and the ending stocks remained relatively stable at 16.54 million tons [8] Domestic Market Analysis - **Supply Side**: As of December 17, 2025, the cumulative official inspection of cotton was 5.587795 million tons, a year - on - year increase of 15.66%. The new cotton picking is basically over, and the processing has entered the final stage. Cotton companies are more willing to build inventories, and the sentiment of holding back sales has increased [29] - **Demand Side**: As of December 4, the cumulative sales of lint cotton were 2.736 million tons, at a high level in the same period over the years. As of December 18, the operating load of spinning mills in the mainstream areas was 65.2%, a 0.15% decrease from the previous week. Spinning mills are cautious about replenishing stocks, and the raw material inventory days are slowly decreasing [29] Option Trading Strategy - The volatility decreased slightly compared with the previous day. The PCR of the main contract of Zhengzhou cotton yesterday was 0.7094, and the PCR of the trading volume of the main contract was 0.8660. The trading volume of both call and put options decreased today. It is recommended to wait and see [43] Futures Trading Strategy - **Unilateral**: It is expected that the US cotton will mostly trade within a range in the future, and Zhengzhou cotton will fluctuate. - **Arbitrage**: Wait and see [47] Part II: Weekly Data Tracking - **Internal and External Price Difference**: The document shows the historical trends of the internal - external cotton price difference and the 9 - 1 month price difference trend, which can help understand the price relationship between domestic and international cotton and the price difference between different contract months [50][51] - **Mid - end Situation**: It presents the operating load of pure cotton yarn mills, the load of all - cotton grey fabric mills, and the inventory days of yarn and grey fabric, reflecting the production and inventory status of the mid - end of the cotton industry chain [54] - **Cotton Inventory**: It shows the historical data of national cotton commercial inventory, spinning mill industrial inventory, and reserve inventory, which helps to understand the overall inventory situation of the cotton market [56] - **Spot - Futures Basis**: It includes the basis of cotton in January, May, and September, the average basis trend of US seven - major market upland cotton, and the basis of C32S cotton yarn spot - Zhengzhou cotton yarn active contract, which is important for analyzing the relationship between spot and futures prices [59]

1. Report Industry Investment Rating No relevant content provided. 2. Core Viewpoints of the Report - The international cotton market, especially the US cotton market, is expected to continue trading in a range due to limited fundamental contradictions. The global cotton production and consumption adjustments are minor, with期末库存 remaining relatively stable [8]. - In the domestic market, cotton procurement is mostly finished. Short - term downstream demand shows little change. New cotton sales are better than in previous years, and cotton prices are expected to remain oscillating with an upward bias [29]. - For trading strategies, in the short - term, cotton is expected to oscillate. For futures, it is expected that US cotton will trade in a range, and Zhengzhou cotton will oscillate. For options, a wait - and - see approach is recommended [45][47]. 3. Summary by Directory First Part: Domestic and International Market Analysis International Market Analysis - **US Cotton Market**: The US cotton market has limited fundamental contradictions and is expected to trade in a range. As of December 5, 2025, the cumulative inspection volume of US upland cotton + Pima cotton was 2.0085 million tons, accounting for 65.7% of the estimated annual output, 11% slower year - on - year. The weekly and quarterly deliverable ratios are relatively high [8]. - **US Cotton Sales**: As of the week ending November 13, 2025, the weekly signing volume of 2025/26 US upland cotton was 42,600 tons, down 36% week - on - week but up 10% compared to the four - week average and 22% year - on - year. The weekly shipment volume was 25,700 tons, down 17% week - on - week, 27% compared to the four - week average, but up 1% year - on - year [8]. - **CFTC**: As of December 5, 2025, the number of unpriced contracts on the ON - CALL 2603 contract by sellers increased by 692 to 22,408, an increase of 20,000 tons week - on - week. The total number of unpriced contracts by sellers in the 25/26 season increased by 727 to 40,020, equivalent to 910,000 tons, also an increase of 20,000 tons week - on - week [8]. - **Brazil**: According to CONAB's December 2025/26 production forecast, the total cotton production in Brazil in 2024/25 is expected to be 4.076 million tons, remaining stable month - on - month. The 2025/26 production is expected to be 3.96 million tons, a decrease of 68,000 tons month - on - month [8]. - **India**: The CAI's report shows that as of November 30, 2025, compared with the previous month's assessment, India's 2025/26 cotton production increased by 80,000 tons, imports increased by 90,000 tons, exports increased by 20,000 tons, and domestic demand decreased by 90,000 tons, leading to a 230,000 - ton increase in ending stocks [8]. - **Global**: According to the USDA's December global cotton production and consumption forecast, the global cotton production in December was 26.08 million tons, a decrease of 64,000 tons month - on - month. The total consumption decreased by 60,000 tons to 25.82 million tons, and the ending stocks remained relatively stable at 16.54 million tons [8]. Domestic Market Analysis - **Supply**: As of December 10, 2025, the cumulative cotton inspection volume reached 5.084203 million tons, a year - on - year increase of 15.94%. As of November 28, 2025, the total commercial cotton inventory was 4.1794 million tons, a week - on - week increase of 379,300 tons (9.98%) [29]. - **Demand**: As of December 4, 2025, the cumulative sales of lint cotton were 2.736 million tons, at a high level in the same period over the years, 1.633 million tons more than the average of the past four years. As of December 11, 2025, the operating load of spinning mills in the mainstream areas was 65.3%, unchanged from the previous week. The yarn inventory of spinning mills continued to increase, with inventory pressure emerging [29]. Option Trading Strategy - The implied volatility of cotton at - the - money options decreased slightly. The PCR of the main contract of Zhengzhou cotton was 0.7094, and the volume PCR was 0.8660. Both call and put option volumes decreased. A wait - and - see approach is recommended [43]. Futures Trading Strategy - **Trading Logic**: The supply of new cotton is abundant in the short - term, and demand orders are generally weak, with most downstream orders being small and scattered. Considering that previous negative factors have been reflected in the market, cotton is expected to oscillate in the short - term [45]. - **Strategies**: It is expected that US cotton will trade in a range, and Zhengzhou cotton will oscillate. For arbitrage, a wait - and - see approach is recommended [47]. Second Part: Weekly Data Tracking - **Internal - External Price Difference**: The chart shows the historical data of the internal - external cotton price difference and the 9 - 1 spread trend of cotton futures contracts [50][51]. - **Mid - stream Situation**: Data on the operating load of pure - cotton yarn mills, full - cotton grey fabric mills, and the inventory days of yarn and grey fabric are presented [54]. - **Cotton Inventory**: Information on the historical data of national commercial cotton inventory, industrial cotton inventory of spinning mills, and state reserve inventory is provided [56]. - **Basis**: The basis data of cotton futures contracts (January, May, September) and the basis of US upland cotton are shown [59].

Report Title and Analyst Information - The report is titled "Cotton Weekly Report: New Cotton Sales are Fast, Cotton Prices are Oscillating Strongly" and is written by researcher Liu Qiannan from Galaxy Futures' Agricultural Products Research Department [1] Report's Core View - The international market expects U.S. cotton to continue to oscillate within a range, while the domestic market anticipates that cotton prices will oscillate strongly. Overall, short - term cotton prices are expected to oscillate, with the current good cotton sales providing support [8][29][45] 1. International Market Analysis U.S. Cotton Market - The U.S. cotton market has few fundamental contradictions and is expected to oscillate within a range. As of the week of November 28, 2025, the cumulative inspection volume of U.S. upland cotton + Pima cotton was 1.7585 million tons, accounting for 57.3% of the estimated annual U.S. cotton production, 12% slower year - on - year. The weekly deliverable ratio was 85.7%, and the quarterly deliverable ratio was 82%, 0.5 percentage points lower year - on - year but increasing quarter - on - quarter [8] - As of the week of October 30, 2025/26 U.S. upland cotton weekly contracts totaled 18,500 tons, a 39% weekly decrease and a 51% decrease from the average of the previous four weeks; weekly shipments were 33,200 tons, a 16% weekly decrease and a 7% decrease from the average of the previous four weeks [8] - As of November 28, the number of un - priced seller contracts on the ON - CALL 2603 contract increased by 634 to 21,716, an increase of 10,000 tons week - on - week. The total number of un - priced seller contracts in the 25/26 season increased by 1001 to 39,293, equivalent to 890,000 tons, an increase of 20,000 tons week - on - week [8] Brazil - The Mato Grosso Institute of Agricultural Economics predicts that the total output of the main producing region will drop to 2.58 million tons in 2026 due to a reduction in the sown area to 1.43 million hectares, mainly because of rising cotton production costs and poor crop yields this season. The Brazilian Cotton Producers Association predicts the 2026 national total output to be 3.829 million tons [8] India - The Indian Cotton Association released its first supply - demand balance sheet for the 2025/26 season, forecasting a production of 30.5 million bales (170 kg per bale), a decrease of 740,000 bales compared to the 2024/25 season. Consumption is expected to be 30 million bales, a decrease of 1.4 million bales from the previous season. Exports are forecasted at 1.7 million bales, and imports at 4.5 million bales, indicating that India is expected to become a net importer in the 2025/26 season [8] Global - According to the latest November global cotton production and sales forecast by the USDA, the global total cotton production in November was 26.14 million tons, an increase of 520,000 tons month - on - month; total consumption increased by 11,000 tons to 25.88 million tons; ending stocks increased by 607,000 tons to 16.53 million tons [8] 2. Domestic Market Logic Analysis Supply Side - As of 24:00 on December 3, 2025, the cumulative official inspection was 20,147,916 bales, totaling 4,548,335 tons, a 16.88% year - on - year increase. The cumulative official inspection volume of Xinjiang cotton was 4,474,521 tons, a 18.34% year - on - year increase [29] - As of November 28, 2025, the total commercial cotton inventory was 4.1794 million tons, an increase of 379,300 tons (9.98% increase) week - on - week. Among them, the commercial cotton in Xinjiang was 3.6164 million tons, a 373,900 - ton (11.53% increase) week - on - week increase [29] Demand Side - As of November 27, the cumulative sales of lint cotton were 2.423 million tons, at a high level in the same period over the years, an increase of 1.769 million tons compared to the average of the past four years [29] - As of December 4, the operating load of spinning mills in the mainstream areas was 65.3%, a 0.31% decrease from the previous week. The raw material inventory decreased slightly, and the yarn inventory of spinning mills in the main areas was 30.2 days, a 0.67% weekly increase [29] Overall Outlook - The supply side has a large amount of new cotton on the market, and the short - term supply remains loose. The demand side has orders in the off - season, and the overall performance is average. Considering that the previous negative factors have been reflected in the market, and the current cotton sales are good, it is expected that the short - term cotton price will oscillate strongly [29] 3. Option Strategy - The volatility decreased slightly compared to the previous day. The PCR of the main contract of Zhengzhou cotton yesterday was 0.7094, and the volume PCR of the main contract was 0.8660. The trading volume of both calls and puts decreased today. It is recommended to wait and see [43] 4. Futures Trading Strategy Trading Logic - The supply side has a large amount of new cotton on the market, and the short - term supply is loose. The demand side's orders are generally small and scattered. Considering that the previous negative factors have been reflected in the market, it is expected that short - term cotton prices will oscillate [45] Specific Strategies - Unilateral trading: It is expected that the future trend of U.S. cotton will mostly oscillate within a range, and Zhengzhou cotton is expected to oscillate [47] - Arbitrage: Wait and see [47] 5. Weekly Data Tracking Mid - stream Situation - Data on the operating load of pure - cotton yarn mills, all - cotton grey fabric mills, yarn inventory days, and grey fabric inventory days are presented, reflecting the mid - stream production and inventory situation [54] Cotton Inventory - Data on national commercial cotton inventory, spinning mill industrial cotton inventory, and reserve inventory are presented, showing the overall inventory situation of the cotton market [56] Basis Spread - Data on the basis spread between cotton futures and spot, including the basis spread of cotton in January, May, and September, and the basis spread of U.S. cotton, are presented, reflecting the relationship between futures and spot prices [59]

Report Title - Cotton Weekly Report: Acquisition Enters Peak, Cotton Prices Fluctuate Slightly Higher [1] Report Industry Investment Rating - Not provided Core Viewpoints - The report anticipates that the US cotton market will likely remain range - bound, while the Zhengzhou cotton market is expected to show a slightly bullish trend in the short term due to stable acquisition prices and unchanged demand [42]. Summary by Directory Part I: Domestic and International Market Analysis International Market Analysis - **US Cotton Market**: The fundamentals have changed little, and the market is expected to move sideways. The cumulative inspection volume of US upland cotton and Pima cotton as of October 17, 2025, is 376,700 tons, accounting for 12% of the annual production forecast, 27% slower than the same period last year. The weekly and quarterly deliverable ratios are 71% and 77.8% respectively, with the quarterly ratio down 2.8 percentage points month - on - month. As of September 18, 2025, the weekly signing volume of 2025/26 US upland cotton decreased by 54%, and the weekly shipment volume increased by 14% [8]. - **Pakistan**: As of October 15, 2025, the cumulative new cotton listing volume in the 2025/26 season reached 588,000 tons, a 22% year - on - year increase, with 471,000 tons purchased by textile mills and 98,000 tons unsold [8]. - **Brazil**: As of October 17, the soybean sowing progress in Mato Grosso has accelerated to about 44%, about 18 percentage points faster than the same period last year, which is favorable for subsequent cotton sowing [8]. - **India**: The 2024/25 cotton balance sheet remains stable compared to last month. The beginning inventory increased by 170,000 tons, production decreased by 220,000 tons, imports increased by 400,000 tons, domestic demand increased by 20,000 tons, exports decreased by 180,000 tons, and the ending inventory increased by 520,000 tons compared to the previous year. The market expects the 2025/26 production to be between 5.525 million and 5.61 million tons [8]. - **Global**: According to the latest September global cotton production and sales forecast by the USDA, the global cotton production in September was 25.62 million tons, an increase of 230,000 tons month - on - month. China's production 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 [8]. Domestic Market Logic Analysis - **Supply Side**: The domestic new cotton harvest is in full swing. As of October 22, 2025, the cumulative public inspection volume was 1,013,898 tons, a 71.19% year - on - year increase. As of October 17, 2025, the total commercial cotton inventory was 1.4334 million tons, a 24.06% increase from the previous week [25]. - **Demand Side**: As of October 16, the operating rate of spinning mills in the mainstream areas was 65.6%, unchanged from the previous week. The inventory of cotton in spinning mills was equivalent to 27.10 days of stock, and the yarn inventory of spinning mills was 30 days, a 0.67% increase from the previous week [25]. - **Overall**: The acquisition progress has entered a peak, acquisition prices are stable, and the market is expected to fluctuate slightly higher in the short term [25]. Option Strategy - Volatility decreased slightly compared to the previous day. The trading volume of both call and put options increased. It is recommended to take a wait - and - see approach [39]. Futures Trading Strategy - **Unilateral**: The US cotton market is expected to move sideways, while the Zhengzhou cotton market is expected to show a slightly bullish trend. - **Arbitrage**: Short the November contract and long the January contract [42]. Part II: Weekly Data Tracking - **Mid - stream Situation**: Data on the operating rate of pure cotton yarn mills, full - cotton greige fabric mills, and inventory days of yarn and greige fabric are presented [49]. - **Cotton Inventory**: Information on national commercial cotton inventory, spinning mills' industrial cotton inventory, and reserve inventory is provided [51]. - **Basis Situation**: Data on the basis of cotton futures contracts and the basis of US upland cotton are shown [54].

1. Report Industry Investment Rating No relevant information provided. 2. Core Viewpoints - The cotton market shows a trend of weakening oscillations. Internationally, the US cotton market is expected to oscillate, while domestically, the Zhengzhou cotton market is expected to oscillate slightly weaker [8][27]. - In September, as new cotton enters the acquisition period, the market focus shifts to the opening price of new cotton. With high expected production in Xinjiang and low enthusiasm among ginning mills for acquisition, large - scale panic buying is not expected. There will be selling hedging pressure on the market as new cotton is listed in large quantities. Although the downstream demand has slightly improved in the peak season, the improvement is limited, and the boosting effect on the market is also limited [27][43]. 3. Summary by Relevant Catalogs 3.1 International Market Analysis - **US Cotton Market**: With no significant changes in the macro - environment and a high good - quality rate in the current fundamentals, the US cotton market is expected to oscillate [8]. - **US Cotton Growth**: As of September 7, the boll - setting rate was 97%, the flocculation rate was 40%, the harvesting rate was 8%, and the good - quality rate was 54%. The growth was accelerating compared to the previous period, and the progress caught up with the five - year average [8]. - **US Cotton Sales**: As of September 4, the weekly signing volume of 2025/26 US upland cotton was 2.94 tons, a 47% weekly decrease and a 33% decrease compared to the average of the previous four weeks. The weekly shipment volume was 2.95 tons, a 16% weekly decrease and a 2% decrease compared to the average of the previous four weeks [8]. - **CFTC Position**: As of September 5, the number of unpriced contracts of sellers on the ON - CALL 2512 contract decreased by 1671 to 20121, a reduction of 40,000 tons compared to the previous week [8]. - **Brazil**: According to the September 2024/25 production forecast by CONAB, the total cotton production in Brazil is expected to be 4.061 million tons, an increase of 126,000 tons from the previous month [8]. - **India**: From September 4 - 10, the weekly rainfall in the main cotton - producing areas was 66.1mm, 28.3mm higher than the normal level and 17.6mm higher than the same period last year. The cumulative rainfall from June 1 - September 10 was 849mm, 107.5mm higher than the normal level [8]. - **Global Situation**: According to the USDA's August global cotton production and sales forecast, the global cotton production in August was 25.39 million tons, a decrease of 391,000 tons from the previous month. The total consumption decreased by 30,000 tons to 25.68 million tons, and the ending inventory decreased by 742,000 tons to 16.09 million tons [8]. 3.2 Domestic Market Logic Analysis - **Market Outlook**: As new cotton enters the acquisition period in September, the market focus shifts to the opening price of new cotton. The downstream demand improvement is limited, and the market is expected to oscillate weakly in the short term [27]. - **Supply Side**: The new - season cotton is growing well, maintaining a harvest expectation. As of mid - August, the national commercial cotton inventory was 1.8202 million tons, at a low level in the same period over the years. As of September 5, the total commercial cotton inventory was 1.4156 million tons, a decrease of 131,400 tons (8.49%) from the previous week [27]. - **Demand Side**: Although it has entered the peak demand season, the downstream demand change is not obvious. As of mid - August, the cotton industrial inventory of cotton textile enterprises was 924,200 tons, and the yarn inventory was 27.23 days, and the gray fabric inventory was 35.14 days. As of September 11, the mainstream spinning mills' operating load was 66.5%, a 0.76% increase from the previous week [27]. 3.3 Option Strategy - **Volatility Judgment**: The HV on the previous day was 10.44697, and the volatility decreased slightly compared to the previous day. - **Option Strategy Recommendation**: The PCR on the previous day was 0.7370, and the trading volume PCR of the main contract was 0.7253. The trading volumes of both call and put options increased today. It is recommended to wait and see [41]. 3.4 Futures Trading Strategy - **Unilateral Trading**: It is expected that the US cotton market will mostly oscillate in the future, and the Zhengzhou cotton market is expected to oscillate slightly weaker. It is recommended to short at high prices [45]. - **Arbitrage**: Wait and see [45]. 3.5 Weekly Data Tracking - **Mid - end Situation**: Data on the operating load of pure cotton yarn mills, full - cotton gray fabric load, yarn inventory days, and gray fabric inventory days are provided, showing the mid - end situation of the cotton industry [52]. - **Cotton Inventory**: Historical data on national commercial cotton inventory, spinning mills' industrial cotton inventory, and reserve inventory are provided [54]. - **Spot - Futures Basis**: Information on the basis of cotton and cotton yarn, including the basis of different contract months and the basis of US cotton, is provided [57].

1. Report Industry Investment Rating No information provided in the content. 2. Core View of the Report The report indicates that the demand for cotton has not changed significantly, and cotton prices are expected to be mainly volatile. In the international market, US cotton is expected to move in a volatile manner, while in the domestic market, short - term Zhengzhou cotton is expected to show a slightly stronger volatile trend [1][8][25]. 3. Summary by Relevant Catalogs 3.1 International Market Analysis - **US Cotton Market**: There are no obvious changes in the macro - aspect. Fundamentally, the current good - to - excellent rate is at a relatively high level in the same period over the years, so the US cotton trend is expected to be mainly volatile [8]. - **US Cotton Growth**: As of August 17, the budding rate of US cotton was 97%, the boll - setting rate was 73%, the boll - opening rate was 13%, and the good - to - excellent rate was 55%. The growth progress was relatively slow, but the good - to - excellent rate was higher than the historical average [8]. - **US Cotton Sales**: As of the week ending August 14, the weekly signing volume of 2025/26 US upland cotton was 24,000 tons, a week - on - week decrease of 56%; the weekly shipment volume was 28,000 tons, a week - on - week decrease of 14% [8]. - **CFTC Position**: As of August 15, the number of unsold contracts of sellers on the ON - CALL 2512 contract increased by 525 to 21,948, and the total number of unsold contracts of sellers in the 25/26 season increased by 876 to 44,381, equivalent to 1.01 million tons [8]. - **Brazil**: According to CONAB's August report, the total cotton output in Brazil in the 2024/25 season is expected to be 3.935 million tons, a decrease of 3,000 tons from the previous month [8]. - **India**: From August 14 to 20, the weekly rainfall in the main cotton - producing areas in India was 108.2 mm, higher than the normal level and the same period last year. The cumulative rainfall during the rainy season was about 11% higher [8]. - **Global Situation**: According to the latest USDA August forecast, the global cotton output in August was 25.39 million tons, a month - on - month decrease of 391,000 tons; the total consumption decreased by 30,000 tons to 25.68 million tons; the ending inventory decreased by 742,000 tons to 16.09 million tons [8]. 3.2 Domestic Market Analysis - **Supply Side**: As of mid - August, the national commercial cotton inventory in China was 1.8202 million tons, at a low level in the same period over the years. The sales volume has increased, and the weekly inventory shows a downward trend [25]. - **Demand Side**: It is currently the off - season for market consumption. As of mid - August, the industrial inventory of cotton in cotton textile enterprises was 924,200 tons, and the yarn and fabric inventories were 27.23 days and 35.14 days respectively. The weekly data shows that the operating rate of spinning mills has increased slightly [25]. - **Comprehensive Outlook**: In the short term, the impact of the macro - level is expected to weaken. Fundamentally, the cotton supply is still relatively tight, and the demand is expected to improve in August. Short - term Zhengzhou cotton is expected to show a slightly stronger volatile trend [25]. 3.3 Option Trading Strategy - **Volatility Judgment**: The 120 - day HV was 10.2496 yesterday, and the volatility increased slightly compared with the previous day [39]. - **Option Strategy Recommendation**: Yesterday, the position PCR of the main contract of Zhengzhou cotton was 0.7867, and the trading volume PCR was 0.6430. Today, the trading volumes of both call and put options increased. The recommendation is to sell put options [39]. 3.4 Futures Trading Strategy - **Trading Logic**: The short - term impact of tariffs may weaken. Fundamentally, the cotton supply is tight, and the demand is expected to improve in August. The short - term market is expected to be slightly stronger but with limited upward space [41]. - **Specific Strategies**: Unilateral trading: It is expected that the US cotton will move in a volatile manner, and Zhengzhou cotton is expected to show a slightly stronger volatile trend. Arbitrage: Stay on the sidelines [43]. 3.5 Weekly Data Tracking - **Mid - end Situation**: Information on the operating load of pure - cotton yarn mills, full - cotton fabric load, yarn inventory days, and fabric inventory days is presented through historical data charts [50]. - **Cotton Inventory**: Data on national commercial cotton inventory, industrial inventory of spinning mills, and reserve inventory over the years are provided [52]. - **Spot - Futures Basis**: Information on the basis of cotton in January, May, and September, as well as the basis of US cotton and the basis between cotton yarn C32S spot and the active contract of Zhengzhou cotton yarn is presented [55].

1. Report Industry Investment Rating No relevant content provided. 2. Core View of the Report - The current cotton market is influenced by both domestic and international factors. Internationally, macro - factors have a positive impact on US cotton, with its growth and sales showing specific trends. Domestically, Zhengzhou cotton is expected to maintain an oscillating and slightly upward trend in the short - term. The supply and demand situation at home will also affect the price trend, and macro - factors such as tariff extensions may bring uncertainties [8][15]. 3. Summary by Directory 3.1 International Market Analysis - **US Cotton Market**: Macro - factors have a certain positive impact on US cotton, and its trend is expected to be slightly upward with oscillations. The growth progress of US cotton in planting, budding, and boll - setting is slightly slower year - on - year, but the excellent rate in the main production areas has recovered above the annual average, including in Texas. As of the week ending June 26, 2024/25 US upland cotton weekly signing decreased by 13% week - on - week and 66% compared to the average of the previous four weeks, while 2025/26 annual signing was 2.42 tons. The weekly shipment of 2024/25 US upland cotton increased by 39% week - on - week and 9% compared to the average of the previous four weeks [8]. - **CFTC Position**: As of June 27, the number of un - priced contracts by sellers on the ON - CALL 2512 contract decreased by 252 to 25402, equivalent to a decrease of 10,000 tons compared to last week. The total number of un - priced contracts by sellers in the 25/26 annual increased by 599 to 43715, equivalent to 990,000 tons, an increase of 10,000 tons compared to last week. The total number of un - priced contracts by sellers on ICE decreased to 48293, equivalent to 1.1 million tons, a decrease of 874 compared to last week, equivalent to a decrease of 20,000 tons [8]. - **Brazil**: As of the week ending June 28, the total cotton harvesting progress in Brazil (98%) was 5%, a 1 - percentage - point increase week - on - week and 4.5% slower than the same period last year. The slowdown in harvesting is mainly due to the backward progress in the main production areas, which may be related to the slow growth of crops [8]. - **Global Cotton Situation**: According to the latest USDA data in June, the global cotton production in 25/26 decreased by 178,000 tons to 25.47 million tons, with China's production increasing by 218,000 tons, India's decreasing by 217,000 tons, and the US's decreasing by 109,000 tons to 3.048 million tons. Total consumption decreased by 70,000 tons to 25.638 million tons, with India's consumption decreasing by 109,000 tons to 555,200 tons. The global ending inventory in June decreased by 344,000 tons to 16.721 million tons, with the US's inventory decreasing by 196,000 tons [8]. 3.2 Domestic Market Logic Analysis - **Market Trend**: This week, Zhengzhou cotton showed an oscillating and slightly upward trend, and it is expected to maintain this trend in the short - term [15]. - **Supply Side**: As of mid - June, the national commercial cotton inventory in China was 3.1269 million tons, at a relatively low level in the same period over the years. As of June 27, 2025, the total commercial cotton inventory was 2.8799 million tons, a decrease of 111,600 tons (3.73%) compared to last week. As of July 3, the cumulative sales volume of 2024 cotton was 6.301 million tons, 958,400 tons higher than the five - year average [15]. - **Demand Side**: Currently, it is the off - season for market consumption. In mid - June, the yarn inventory days in China were 23.86, at a medium level in the same period over the years, and the grey cloth inventory was 35.46, also at a relatively low - medium level in the same period over the years. As of July 3, the operating load of spinning mills in the mainstream areas was 71.1%, a 0.14% decrease compared to last week, with little overall change. There was no obvious change in the downstream orders of spinning mills [15]. 3.3 Option Strategy - **Volatility Judgment**: The 30 - day historical volatility (HV) of cotton yesterday was 5.6505. - **Option Strategy Suggestion**: The position PCR of the main contract of Zhengzhou cotton on July 3 was 0.9489, and the trading volume PCR of the main contract was 0.5368, with a decrease in both call and put trading volumes. It is recommended to wait and see [22]. 3.4 Futures Trading Strategy - **Trading Logic**: When the boost from new cotton purchases to the market is limited, if the demand side does not show obvious improvement, the price may weaken. If the demand side performs well, it will have a positive impact on the market. Tariff extensions in July and August may bring uncertainties, and if the tariff issue eases, commodity prices may strengthen [24]. - **Specific Strategies**: It is expected that the future trend of US cotton will be slightly upward with oscillations, and Zhengzhou cotton is expected to show an oscillating and slightly upward trend. For arbitrage, it is recommended to wait and see. For options, it is recommended to sell put options [24]. 3.5 Weekly Data Tracking - **Internal and External Price Difference**: The report presents the internal and external cotton price difference under 1% tariff, as well as the price trends of domestic cotton and imported cotton under 1% tariff [26]. - **Inventory Situation**: It shows the historical data of cotton commercial inventory, industrial inventory, and reserve inventory [30]. - **Basis Situation**: It includes the basis situations of cotton in different months and the basis trend of US seven - major market upland cotton [32].

1. Report Industry Investment Rating No relevant content provided. 2. Core View of the Report The report analyzes the cotton market at home and abroad, suggesting that the short - term trend of Zhengzhou cotton is expected to be oscillating and slightly stronger due to macro - factors, and the trend of US cotton is also expected to be oscillating and slightly stronger. It also provides corresponding trading strategies for options and futures [7][13][22]. 3. Summary by Relevant Catalogs 3.1 International Market Analysis - **US Cotton Market Outlook**: Due to weather uncertainties and potential increased purchases from countries like Vietnam, the US cotton market is expected to be oscillating and slightly stronger [7]. - **US Cotton Growth**: As of May 11, the cotton planting rate in 15 major US cotton - growing states was 28%, 4% slower than last year and 3 percentage points slower than the five - year average. The drought index in the main production areas and Texas continued to decline [7]. - **US Cotton Sales**: In the week ending May 8, 2024/25 US upland cotton weekly contracts were 2.77 million tons, a week - on - week increase of 86% and a 2% increase from the average of the previous four weeks. Weekly shipments were 7.47 million tons, a week - on - week decrease of 17% and a 5% decrease from the average of the previous four weeks [7]. - **CFTC Position**: As of May 9, the number of un - priced seller contracts on the ON - CALL 2507 contract increased by 146 to 18,566, and the total number of un - priced seller contracts in the 24/25 season also increased by 146 to 18,566, equivalent to 420,000 tons [7]. - **Global Production and Sales Forecast**: According to the latest USDA data in May, the total cotton output in 2025/26 is expected to be 25.65 million tons, a reduction of 710,000 tons compared to 2024/25; total consumption is 25.7 million tons, an increase of 304,000 tons; and the ending inventory is 17.06 million tons, a decrease of 6,000 tons [7]. - **Other Countries' Situations**: As of the week ending May 11, 2025, the weekly cotton listing volume in India was 31,000 tons, a year - on - year decrease of 27%. The cumulative listing volume in the 2024/25 season was 4.532 million tons, a year - on - year decrease of 7% [7]. 3.2 Domestic Market Logic Analysis - **Market Trend**: Zhengzhou cotton's trend was strong this week. Affected by macro factors, it is expected to maintain an oscillating and slightly stronger trend in the short term [13]. - **Supply Side**: As of May 14, 2024, the cumulative public inspection of cotton in the 2024/25 season was 6,796,388 tons, a year - on - year increase of 18.71%. As of May 9, 2025, the total commercial cotton inventory was 3.8223 million tons, a week - on - week decrease of 123,900 tons (a decrease of 3.14%) [13]. - **Demand Side**: It is currently the off - season for market consumption. As of the week ending May 15, the cotton inventory of spinning enterprises in mainstream areas was equivalent to 28.8 days, and the yarn inventory of spinning enterprises in major areas was 29.1 days, a week - on - week decrease of 0.68% [13]. - **Macro Aspect**: During the Sino - US economic and trade high - level talks from May 10 - 11, the US promised to cancel 91% of the tariffs on Chinese goods and modify 34% of the reciprocal tariffs, with 24% of them suspended for 90 days. China also made corresponding adjustments to counter - tariffs [13]. 3.3 Option Strategy - **Volatility Judgment**: The 120 - day HV of cotton yesterday was 10.6252, and the implied volatility of options increased slightly compared to the previous day [20]. - **Option Strategy Recommendation**: It is recommended to wait and see. The implied volatility of CF509 - C - 13400 is 11.2%, and that of CF509 - P - 12600 is 13.3%, and CF509 - P - 12200 is 15.1% [20]. 3.4 Futures Trading Strategy - **Trading Logic**: Due to the substantial progress in the Sino - US economic and trade high - level talks, Zhengzhou cotton is expected to strengthen under macro - level influence [22]. - **Strategies**: - **Unilateral**: The future trend of US cotton is likely to be oscillating and slightly stronger, and Zhengzhou cotton is expected to be strong due to macro - influence [22]. - **Arbitrage**: Short September and long January [22]. - **Options**: Sell call options [22]. 3.5 Weekly Data Tracking - **Internal and External Price Difference**: The report presents the trends of internal and external cotton price differences and the 9 - 1 price difference [24][25]. - **Mid - end Situation**: It shows the operating loads of pure - cotton yarn mills and full - cotton grey fabric mills, as well as the inventory days of yarn and grey fabric [27]. - **Cotton Inventory**: The report shows the historical data of national cotton commercial inventory, spinning enterprise industrial inventory, and reserve inventory [28]. - **Spot - Futures Basis**: It presents the basis data of cotton in different months and the basis of US cotton [30].