1. Report Industry Investment Rating - No information provided in the report 2. Core Viewpoints - This week, the domestic cotton futures market showed a volatile consolidation trend, with the main contract of Zhengzhou cotton fluctuating in the range of 15,200 - 15,450 yuan/ton. The core drivers are as follows: last week, cotton import quotas were issued, and the market was worried about policy regulation due to excessive and rapid rise in cotton prices before planting; the operating rate of downstream textile enterprises rebounded, demand improved marginally, and peak - season demand was gradually released; US cotton rebounded, narrowing the domestic - foreign price difference. In the short term, the market lacks a strong driver, and Zhengzhou cotton oscillates at a high level. In the medium - to - long term, it remains optimistic under the condition of a decline in planting area. Attention should be paid to downstream demand and new cotton planting [4]. 3. Summary by Related Catalogs 3.1 US Cotton Situation - As of March 17, the drought degree and coverage index of the main US cotton - producing areas was 227, slightly down month - on - month and up 94 year - on - year; the index in Texas was 253, flat month - on - month and up 58 year - on - year. The drought level in the main US cotton - producing areas and Texas remains at a relatively high level in recent years. According to the latest weekly position report released by CFTC, as of the week of March 17, the volume of unpriced sell orders rose to 63,052 lots, while the unpriced buy orders decreased, indicating an increase in bullish sentiment in the international market. US cotton has risen significantly recently [5]. - As of the week of March 19, the weekly signing volume of US upland cotton in the 2025/26 season was 45,900 tons, an increase month - on - month; the weekly shipment volume was 90,800 tons, a 46% increase month - on - month [21]. 3.2 Cotton Inventory and Consumption - As of mid - March 2026, the total commercial inventory of cotton was 5.23 million tons, a decrease of 240,000 tons from the end of February and an increase of 60,000 tons compared with the same period last year. Among them, the inventory in Xinjiang was 3.88 million tons, a decrease of 190,000 tons from the end of February and a decrease of 130,000 tons compared with the same period last year. The inventory reduction in Xinjiang is relatively fast [6]. - With the improvement of consumption, the operating rates of yarn mills and fabric mills have increased, and the inventories of finished products have decreased. As of Thursday this week, the operating loads of yarn mills and fabric mills were 58.1 and 60.8 respectively, having recovered above the levels of the same period last year; the inventories of finished products were 16.7 days and 23.6 days respectively, showing a significant decline after the Lantern Festival and currently at the lowest levels in recent years [6]. 3.3 Price and Spread - From March 19 to March 26, 2026, the price of the active contract of Zhengzhou cotton rose from 15,150 yuan/ton to 15,420 yuan/ton, an increase of 270 yuan/ton; the price of ICE active contract rose from 67.71 cents/pound to 69.44 cents/pound, an increase of 1.73 cents/pound [7]. - From March 18 to March 25, 2026, the CotlookA price index decreased from 79.35 cents/pound to 78.2 cents/pound, a decrease of 1.15 cents/pound; the price of Indian S - 6 increased from 55,800 rupees/candy to 56,100 rupees/candy, an increase of 300 rupees/candy [10]. - From March 19 to March 26, 2026, the port pick - up prices of imported yarns from India, Vietnam, and Indonesia all increased. The price of Indian C32S increased by 60 yuan/ton, the price of Vietnamese C32S increased by 60 yuan/ton, and the price of Indonesian C32S increased by 40 yuan/ton [11]. - From March 20 to March 27, 2026, the import prices of US EMOT M and Brazilian M cotton under 1% tariff and sliding - scale duty both increased. The price of US EMOT M increased by 2.10 cents/pound, with an increase of 354 yuan/ton under 1% tariff and 230 yuan/ton under sliding - scale duty; the price of Brazilian M increased by 2.10 cents/pound, with an increase of 354 yuan/ton under 1% tariff and 223 yuan/ton under sliding - scale duty [12]. - As of last Friday, the basis between the 328 cotton spot price index and the main contract of Zhengzhou cotton widened week - on - week; the basis between the C32S yarn price index and the main contract of Zhengzhou yarn also widened week - on - week [46][47]. - As of last Friday, the price difference between the domestic 328 cotton price index and the imported cotton port pick - up price index under sliding - scale duty increased week - on - week; the price difference between the C32S cotton yarn price index and the port pick - up price also increased week - on - week [50]. - As of last Friday, the price difference between the main contract of Zhengzhou yarn and the main contract of Zhengzhou cotton on the futures market widened week - on - week; the spot theoretical processing profit of 32 - count pure cotton yarn showed an increased loss week - on - week [54]. 3.4 Futures Positions and Warehouse Receipts - As of last Friday, the total of Zhengzhou cotton warehouse receipts and valid forecasts was 12,773 lots; the total of Zhengzhou yarn warehouse receipts and valid forecasts was 300 lots [61].

报告导读： 美棉自上周价格持续走强，需求端受国家发改委增发进口棉花配额、中美会谈 等催化。供给端巴西减产落地，当前美国主产棉区干旱指数处历史高位，后续密切关注美 国和中国播种情况。 持续重点推荐受益于美棉上行的纱线龙头 。 美棉价格持续走强，需求端催化显现。 ICE2 号美棉期货 3/17 日报收 68.71 美分 / 磅，较上周初涨 6.2% ，较 25Q4 均价涨 7.0% ，判断主要由于① 3 月 16 日发改委公布增发 30 万吨加贸棉花进口配额，②援引路透社报道，在巴黎举行的中美双边贸易谈判首日，中国谈判代表表示愿意增加购买美国农产品 的规模，包括家禽、牛肉和非大豆类农作物（判断较大可能包含棉花）。持续重点推荐受益于美棉上行的纱线龙头。 判断发改委增发进口棉花配额主要由于当下较大内外棉差价。 此次增发进口配额环比 24 和 25 年规模增加 10 万吨，且发布时间明显早于过去的 7-8 月， 判断主要由于年初至今持续扩大的内外棉价差。目前美棉和新疆棉价差持续扩大至 6397 元 / 吨， cotlook A 和新疆棉价差扩大至 5265 元 / 吨，二者价差 系近 10 年 97.7%/99.1% ...

Investment Rating - The report assigns an "Accumulate" rating for the textile and apparel industry [6]. Core Insights - The price of American cotton has been rising continuously, driven by demand-side catalysts such as the National Development and Reform Commission's issuance of additional import cotton quotas and Sino-U.S. trade talks [2][5]. - The supply side is affected by a reduction in production from Brazil, with the current drought index in major U.S. cotton-producing areas at historical highs, necessitating close monitoring of planting conditions in the U.S. and China [2][5]. - The report continues to recommend leading yarn companies, Bailong Oriental and Tianhong International Group, as beneficiaries of the rising American cotton prices [2][5]. Summary by Sections Price Trends - As of March 17, the ICE No. 2 American cotton futures closed at 68.71 cents per pound, reflecting a 6.2% increase from the beginning of the week and a 7.0% increase compared to the average price in Q4 2025 [5]. - The increase is attributed to the issuance of an additional 300,000 tons of import cotton quotas by the National Development and Reform Commission and positive signals from U.S.-China trade negotiations regarding increased purchases of American agricultural products, including cotton [5]. Import Quotas - The additional import quota is 100,000 tons larger than the previous years' quotas for 2024 and 2025, indicating a response to the widening price gap between domestic and foreign cotton [5]. - The price difference between American cotton and Xinjiang cotton has expanded to 6,397 yuan per ton, with the Cotlook A and Xinjiang cotton price difference at 5,265 yuan per ton, both at near historical highs [5]. Trade Agreements - In February 2026, the U.S. reached trade agreements with Bangladesh and India, which will facilitate the use of American cotton in exports to the U.S. under zero tariffs, potentially boosting American cotton exports [5]. - China remains the largest importer of American cotton, accounting for nearly 30% of U.S. cotton exports in 2024, and any further procurement signals from China could enhance demand [5]. Supply Side Analysis - Brazil's cotton production is expected to decline by 6.9% in the 2025/26 season, with significant reductions in key states [5]. - The drought conditions in major U.S. cotton-producing states are severe, with historical drought indices recorded, particularly in Georgia, Arkansas, and Alabama [5].

Investment Strategy Overview - The report indicates that 2026 is expected to be a turning point for consumption in the textile and apparel industry, focusing on areas with potential for penetration growth [4][6] - In the first two months of 2026, both domestic consumption and export of textiles and apparel exceeded expectations, suggesting a favorable window for low-positioned investments in the sector [5][6] - The report anticipates a recovery in the industry chain, with upstream prices rising, midstream facing pressure, and downstream showing differentiation [5][6] Textile Manufacturing Insights - The report highlights a strong cycle in textile manufacturing post-industry reshuffling, with stronger cycles leading to stronger growth [6] - Upstream price increases are noted, particularly for Australian wool and cotton, with significant price elasticity observed due to production cuts and demand recovery [5][6] - Midstream sports manufacturing is under short-term pressure but is expected to see new growth in the medium to long term, influenced by the recovery of key clients like Nike [5][6] Apparel and Home Textiles Trends - The report identifies 2026 as a pivotal year for apparel and home textiles, emphasizing the need to explore market penetration opportunities [6] - The high-performance outdoor apparel market is highlighted as having low penetration and significant growth potential, with a market size of 102.7 billion yuan in 2024 [5][6] - The report also notes a correlation between high-end apparel demand and travel/business activities, suggesting a recovery in mid-to-high-end apparel consumption [5][6] Investment Recommendations - The report recommends focusing on quality wool spinning companies and companies with global supply chains that have sufficient low-cost materials, such as Baolong Oriental [5][6] - For midstream sports manufacturing, companies like Shenzhou International, Huayi Group, and Yuanyuan Group are recommended, with a watch on the recovery pace of Nike [5][6] - The report suggests that companies in the sleep economy, such as Luolai Life and Mercury Home Textiles, are well-positioned to benefit from the growing market for innovative home textile products [5][6] Cotton Market Analysis - The report predicts a reduction in global cotton production in the 2026/27 season, which may lead to a decrease in inventory-to-consumption ratios, potentially driving cotton prices higher [40][45] - The report notes that the cotton market is currently experiencing a price bottom, with external cotton prices expected to rebound due to significant price differentials [46][48] Brand Recovery Pathways - The report outlines a two-phase recovery pathway for brands, emphasizing the importance of inventory clearance as a precursor to a new operational cycle [64][66] - The first phase involves clearing inventory across all channels, while the second phase sees a recovery in retail sales and expansion of franchise operations, leading to increased profitability [66]

Report Industry Investment Rating - Not mentioned in the provided content Core Viewpoints - Since March, the ongoing conflict in the Middle East and the closure of the Strait of Hormuz have led to significant increases and large fluctuations in energy and chemical products such as crude oil and shipping. Against this backdrop, combined with capital and the strong fundamental situation of Zhengzhou cotton, the cotton price has experienced increased intraday fluctuations but generally shown a strong upward trend. The main contract reached a new stage high of 15,725 yuan/ton this week. In the medium to long term, the cotton planting area is expected to decline in 2026, and the supply-demand situation will improve, so there is still room for cotton prices to rise. The extent of the increase depends on the new cotton planting area [3]. - The USDA report is slightly bearish. Globally, mainly due to the increase in production in Brazil and China, the global cotton production forecast has been raised by over 1.13 million bales; the consumption in multiple countries has been lowered, resulting in a month-on-month decrease of 140,000 bales in global cotton consumption; the global ending stocks forecast has been raised by 1.28 million bales. In China, the production forecast has been raised by 500,000 bales to 35.5 million bales; at the same time, the consumption has also been raised by 500,000 bales, and after offsetting each other, the ending stocks forecast remains the same as last month. As of March 10, the national cotton inspection volume was 7.5 million bales, 220,000 tons less than the USDA's March production forecast. Currently, the inspection of new cotton in China is coming to an end, and it is expected that there will be little change in the production adjustment in the later stage [3]. - In the United States, the key data of production, consumption, exports, and ending stocks remain the same as last month. As the new cotton planting season approaches, the market is concerned about the new cotton planting area, and attention should be paid to the planting intention data released by the USDA at the end of the month [4]. Summary by Relevant Catalogs Supply and Demand Data - **Global**: Beginning stocks are 7.376 billion bales, production is 12.099 billion bales, imports are 4.391 billion bales, consumption is 11.858 billion bales, exports are 4.391 billion bales, and ending stocks are 7.639 billion bales. Month-on-month, production increased by 113 million bales, imports increased by 20 million bales, consumption decreased by 14 million bales, exports increased by 20 million bales, and ending stocks increased by 128 million bales. Year-on-year, beginning stocks increased by 46 million bales, production increased by 245 million bales, imports increased by 88 million bales, consumption decreased by 36 million bales, exports increased by 150 million bales, and ending stocks increased by 263 million bales [7]. - **China**: Beginning stocks are 3.484 billion bales, production is 3.55 billion bales, imports are 560 million bales, consumption is 3.95 billion bales, exports are 8 million bales, and ending stocks are 3.636 billion bales. Month-on-month, production increased by 50 million bales, and consumption increased by 50 million bales. Year-on-year, beginning stocks decreased by 187.6 million bales, production increased by 350 million bales, imports increased by 41.5 million bales, consumption increased by 50 million bales, exports increased by 1.4 million bales, and ending stocks increased by 152.5 million bales [7]. - **United States**: Beginning stocks are 400 million bales, production is 1.392 billion bales, imports are 1 million bales, consumption is 160 million bales, exports are 1.2 billion bales, and ending stocks are 440 million bales. Month-on-month and year-on-year, all data remain unchanged [7]. - **India**: Beginning stocks are 922 million bales, production is 2.35 billion bales, imports are 400 million bales, consumption is 2.5 billion bales, exports are 140 million bales, and ending stocks are 1.032 billion bales. Month-on-month, imports increased by 80 million bales, and ending stocks increased by 80 million bales. Year-on-year, beginning stocks decreased by 8.4 million bales, production increased by 30 million bales, imports increased by 95.9 million bales, exports increased by 7.5 million bales, and ending stocks increased by 110 million bales [7]. Inventory Situation - As of the end of February, the national commercial cotton inventory was 5.477 million tons, a month-on-month decrease of 312,000 tons and a year-on-year decrease of nearly 40,000 tons. In the context of a significant increase in cotton production this year, the year-on-year decrease in commercial inventory indicates that overall cotton consumption (sales) has performed well in the past period. Regionally, the commercial cotton inventory in Xinjiang warehouses has decreased rapidly. At the end of February, the commercial cotton inventory in Xinjiang warehouses was 4.07 million tons, a month-on-month decrease of 386,000 tons, the highest decline rate in the same period in recent years; a year-on-year decrease of 270,000 tons, at the lowest level in the same period in recent years [5]. - As of last Friday, the total of Zhengzhou cotton warehouse receipts and valid forecasts was 12,791; the total of Zhengzhou yarn warehouse receipts and valid forecasts was 387 [64]. Price and Market Trends - The price of the active cotton contract has shown an upward trend. From March 6 to March 13, 2026, the price of the ZCE active contract increased from 15,295 yuan/ton to 15,415 yuan/ton, an increase of 120 yuan/ton; the price of the ICE active contract increased from 64.21 cents/pound to 65.8 cents/pound, an increase of 1.59 cents/pound [9]. - The prices of imported cotton and imported yarn have also increased. From March 6 to March 13, 2026, the price of US EMOT M increased from 73.80 cents/pound to 75.00 cents/pound, and the price of Brazilian M increased from 72.40 cents/pound to 73.60 cents/pound. The prices of Indian C32S, Vietnamese C32S, and Indonesian C32S imported yarns all increased by 130 - 140 yuan/ton [14][15]. - The price difference between domestic and foreign cotton has been widening. Last Friday, the price difference between the domestic 328 cotton price index and the port delivery price index of imported cotton under the sliding duty was 33 yuan/ton, a week-on-week increase of -73 yuan/ton; the price difference with the port delivery price of imported cotton under the 1% tariff was 76 yuan/ton, a week-on-week increase of -3 yuan/ton. The price difference between the C32S yarn price index and the port delivery price was 3,121 yuan/ton, a week-on-week increase of 4,230 yuan/ton [52]. - On the futures market, last Friday, the price difference between the Zhengzhou yarn main contract and the Zhengzhou cotton main contract was 6,150 yuan/ton, a week-on-week increase of 240 yuan/ton; the immediate theoretical processing profit of 32-count pure cotton yarn was -2,227 yuan/ton, and the loss increased by 155 yuan/ton week-on-week [57]. Market Activity and Consumption - As of the week ending March 5, the weekly signing volume of 2025/26 US upland cotton was 57,400 tons, a month-on-month increase of 68%, a decrease of 8% compared with the four-week average, and a year-on-year decrease of 7%. Among them, Vietnam signed 26,400 tons and Bangladesh signed 6,400 tons [26]. - The textile and clothing export volume and domestic retail sales in China show certain trends, but specific data and analysis are presented in the form of charts in the report [35]. - The production and circulation prosperity indexes of the Keqiao textile industry also show certain trends, but specific data and analysis are presented in the form of charts in the report [39].

Core Viewpoint - The article emphasizes that inflation expectations serve as a "macro engine" for commodity markets, with recent geopolitical tensions in the Middle East significantly influencing commodity trends, particularly leading to a surge in oil prices and a renewed focus on inflation trades, which may also heighten the risk of stagflation [2]. Group 1: Commodity Trends - Since January, commodities have shown overall strength with a structural market characterized by significant increases in energy prices, high levels in precious metals, a rebound in agricultural products, and weaker performance in the black commodities sector, reflecting rising supply chain risks and intensified policy negotiations [2]. - The recent geopolitical conflicts have notably increased market attention on agricultural products, leading to heightened speculative activity and a significant rise in implied volatility, with agricultural prices increasingly following oil price movements, indicating that macro-level influences outweigh basic supply-demand fundamentals [2]. Group 2: Correlation Between Oil and Agricultural Products - Historical data shows varying correlations between oil and agricultural products, with imported agricultural products being most affected. From 2016 to present, the correlation between Brent crude oil and agricultural prices, such as U.S. soybean oil, cotton, and corn, has been notably strong, often exceeding 0.67 [3]. Group 3: Oil Market Dynamics - In early March, the oil market experienced a rapid upward pulse due to U.S.-Iran tensions, although prices have since retreated, establishing a higher price baseline. The oilseed market has strengthened due to both commodity market sentiment and the supportive fundamentals of biodiesel, making oilseeds a preferred choice among agricultural products [6]. - The current oil market dynamics differ from the 2022 Russia-Ukraine conflict, as the oil market is now influenced by ongoing geopolitical tensions, with no clear signals for a ceasefire, leading to a gradual increase in oil price baselines [9]. Group 4: Agricultural Costs and Production - The conflict has raised fertilizer and chemical costs significantly, with the USDA estimating a 92% increase in fertilizer costs and a 54% increase in chemical costs for soybean planting in 2022. This cost increase is expected to persist into 2025 and 2026, leading to an overall rise in planting costs by approximately 9% [11]. - The soybean market is currently under pressure due to several years of high production, resulting in relatively low prices. However, the market sentiment is shifting, with the potential for upward price movement due to geopolitical events and changes in trade policies [12]. Group 5: Cotton Market Outlook - The ongoing U.S.-Iran conflict is expected to impact the cotton industry through increased costs across the supply chain, including planting, processing, and transportation. The ICAC predicts a 4% decline in global cotton production, which, combined with geopolitical uncertainties, may lead to increased price volatility [19]. - Short-term cotton prices are expected to remain strong, with potential for further increases if the conflict continues, as rising energy costs and declining production expectations converge [20]. Group 6: Sugar Market Dynamics - The global sugar market is currently in a production increase cycle, but prices are under pressure due to high industrial inventories. However, the market is showing signs of cost support, and geopolitical tensions may indirectly influence sugar prices through the ethanol market [27]. - The conflict has created disruptions in sugar supply chains, particularly affecting refined sugar exports, which may lead to tighter supply and upward price pressure in the sugar market [27]. Group 7: Corn Market Insights - The geopolitical tensions have led to significant uncertainty in logistics and production in the Middle East, driving up oil prices and subsequently impacting grain markets. Despite a generally loose supply-demand balance for corn and wheat, macroeconomic factors are currently dominating market dynamics [34]. - Domestic corn prices have strengthened due to market speculation and concerns over supply gaps, with expectations of continued price increases in the short term [34]. Group 8: Egg and Pork Markets - The fluctuations in oil prices are impacting the egg market primarily through cost channels, as rising feed prices due to increased demand for biofuels are expected to elevate production costs for eggs [42]. - The pork market is experiencing indirect effects from rising feed costs, which could lead to increased production costs and potential supply pressures in the near term [49].

Report Industry Investment Rating - Not provided in the content Core Viewpoints - The downstream is still resuming work. The expectations of the "Golden March and Silver April" and high production capacity strongly support the lower limit of cotton prices. The large price difference between domestic and foreign markets and the narrow - range oscillation of US cotton limit the increase of Zhengzhou cotton prices. After a rapid sharp rise last week, it has entered an adjustment phase. In the medium - to - long term, the cotton planting area will decline in 2026, the supply - demand situation will improve, and cotton prices still have room to rise. The increase depends on the situation of the new cotton area [4]. Summary by Related Catalogs Market Situation - As of Thursday this week, the 328 cotton spot price index was 16,583 yuan/ton, a week - on - week decrease of 98 yuan/ton; the closing price of the main Zhengzhou cotton contract was 15,250 yuan/ton, a week - on - week decrease of 100 yuan/ton; the basis between them was 1,333 yuan/ton, a week - on - week increase of 2 yuan/ton. The C32S yarn price index was 21,920 yuan/ton, a week - on - week increase of 50 yuan/ton; the closing price of the main Zhengzhou yarn contract was 21,055 yuan/ton, a week - on - week decrease of 200 yuan/ton; the basis between them was 865 yuan/ton, a week - on - week increase of 250 yuan/ton [38]. - As of Thursday this week, the price difference between the domestic 328 cotton price index and the port pick - up price index of imported cotton under the sliding - scale duty was 86 yuan/ton, a week - on - week increase of 19 yuan/ton; the price difference with the port pick - up price of imported cotton under the 1% tariff was 152 yuan/ton, a week - on - week increase of 324 yuan/ton. The price difference between the C32S cotton yarn price index and the port pick - up price was 2,932 yuan/ton, a week - on - week increase of 4,122 yuan/ton [40]. - As of Thursday this week, on the futures market, the price difference between the main Zhengzhou yarn contract and the main Zhengzhou cotton contract was 5,805 yuan/ton, a week - on - week decrease of 100 yuan/ton; the spot theoretical processing profit of 32 - count pure cotton yarn was - 1,990 yuan/ton, and the loss margin narrowed by 156 yuan/ton week - on - week [44]. - As of Thursday this week, the total of Zhengzhou cotton warehouse receipts and valid forecasts was 12,643; the total of Zhengzhou yarn warehouse receipts and valid forecasts was 363 [51]. Supply and Demand - As of yesterday, the price difference between the domestic 328 cotton price index and the port pick - up price of imported cotton under the sliding - scale duty was about 3,000 yuan/ton, and the price difference under the 1% tariff was as high as 4,100 yuan/ton. Under the high price difference, the import profit of cotton yarn has recovered, and the import volume may increase [5]. - As of this Friday, the start - up load index of yarn mills was 49.09, and that of cloth mills was 48.3. Compared with previous years, the resumption of work this year is a bit slower; the raw material inventory of textile enterprises is at the highest level in the same period in recent years, and their purchasing willingness is not strong, and they replenish inventory at low prices [5]. - The International Cotton Advisory Committee (ICAC) released its March monthly report, showing that the global cotton production in the 2026/27 season is expected to decrease by 4% to 24.8 million tons, with the main production cuts coming from Brazil and the United States; the global cotton consumption is expected to remain stable at 25 million tons [6]. - As of the week ending February 26, the weekly signing volume of 2025/26 US upland cotton was 34,100 tons, a 41% decrease from the previous week, a 50% decrease from the four - week average, and a 10% decrease year - on - year. Among them, Vietnam signed 11,500 tons and Pakistan signed 6,300 tons [20].

1. Report Industry Investment Rating - Not provided in the given content 2. Core Viewpoints of the Report - The probability of Zhengzhou cotton (Zhengmian) continuing to rise is relatively high. The supply in the new year is tightening, the commercial inventory has turned downward, and the reduction in the comprehensive tariff calculation has boosted exports. However, two major risks should be noted: the implementation of the new US tariff policy may change the global cotton trade pattern, and the continuous increase in Brazilian cotton supply may suppress the upward movement of the outer - market prices, and the large price difference between the inner and outer markets will limit the upward space of Zhengmian. [1][30] - The USDA February supply - demand monthly report has a bearish impact, but the outlook forum has released bullish signals. The global cotton production is expected to decrease, demand to increase, and ending inventory to decline in the new year. The market is waiting for a clear signal from the demand side, and the overall situation is bullish with limited downward space. [2][30] 3. Summary by Relevant Catalogs 3.1 Market Review - In February, Zhengmian fluctuated slightly and then broke through to the upside. After the Spring Festival, boosted by international market news, it broke through the previous trading range and reached a maximum of 15,665 yuan/ton. [3] - The international cotton market first declined and then rose in February. At the beginning of February, US cotton was weak, reaching a minimum of 62.86 cents/pound. After the USDA outlook forum released a tightening forecast for the new - year international cotton market supply - demand situation and the weak US dollar provided support, US cotton rose to a maximum of 66.38 cents/pound. [3] 3.2 Domestic Market Analysis 3.2.1 Commercial and Industrial Inventory - In January 2026, the domestic cotton inventory showed the characteristics of "commercial de - stocking and industrial restocking", with a more prominent differentiation in the inventory structure. As of February 15, the total national commercial cotton inventory was 5.5037 million tons, a decrease of 285,000 tons from 5.7887 million tons on January 31. The de - stocking pace in Xinjiang was significantly faster than that in the inland. The industrial inventory increased moderately from 1.001 million tons at the end of January to 1.0292 million tons in the first half of February. [6] 3.2.2 Price Difference between Domestic and International Cotton - The price difference between domestic and international cotton has been widening with a pattern of "strong domestic and weak international". As of February 25, the duty - paid cost of medium - quality imported cotton within the quota (1% tariff) was about 12,782 yuan/ton, 3,547 yuan/ton lower than the price of domestic 3128B cotton. The duty - paid cost of imported cotton with sliding - scale duty was about 13,840 yuan/ton, 2,489 yuan/ton lower than domestic cotton, and the price difference increased by 45 yuan/ton compared with before the Spring Festival. The expected decrease in the planting area of Xinjiang cotton, the impact of Brazilian cotton exports on the outer - market, and the strong purchasing intention of domestic textile enterprises after the Spring Festival are the main driving factors. The price difference expansion has opened the import profit window, and China's cotton imports in the 2026/27 season are expected to increase to 1.52 million tons, a year - on - year increase of 25.0%. In the short term, the increase in imported cotton arrivals may suppress the upward movement of the inner - market, but in the long - term, the price difference is expected to narrow to within 2,000 yuan/ton. [11] 3.2.3 Downstream Market - After the Spring Festival, the resumption of work in domestic textile enterprises was in an orderly manner, with the start - up rate showing the characteristics of "leading in Xinjiang, following in East China, and lagging in South China". As of February 20, the start - up rate of textile enterprises was 18.7%, and as of February 13, the start - up rate of weaving enterprises was 14%. The release of downstream demand needs to be verified. Spinning enterprises are still cautious in restocking, and the "peak season" orders in March and April have not been fully realized. The finished product inventory of weaving enterprises has increased, and the inventory of weaving enterprises is at the second - highest level in five years. [13][15] 3.2.4 Tariff Policy - Since January 2026, the US tariff policy on Chinese textile and clothing has improved marginally, with the comprehensive tariff level dropping from 18.2% to 15.7%, covering intermediate products such as pure cotton yarn and grey cloth and household textile products, which directly reduces the export cost of enterprises. In the long run, the improvement of the tariff policy is expected to increase the export amount of cotton textiles in 2026, but factors such as the Fed's interest - rate cut rhythm and the release of production capacity of Southeast Asian competitors may still restrict the recovery of exports. [18] 3.3 International Market Analysis 3.3.1 Supply - Demand Report - The USDA February supply - demand report shows that in the 2025/26 season, the global cotton production increased by 92,000 tons to 26.096 million tons, consumption decreased by 44,000 tons to 25.847 million tons, and the ending inventory increased by 136,000 tons to 16.353 million tons. The core change in the supply side is concentrated in China, and the main feature on the demand side is the reduction in consumption in Pakistan. [22] 3.3.2 US Cotton Exports - In the 2025/26 season, the total signed sales volume of US upland cotton and Pima cotton was 2.0507 million tons, accounting for 79% of the predicted total export volume for the year (2.61 million tons); the cumulative export shipment volume was 1.0358 million tons, accounting for 51% of the total signed volume for the year. The signing volume has declined slightly, with a significant decline in Vietnam's signing, while signing in Bangladesh, India, and Pakistan has continued to grow. The overall shipment rhythm is stable. The signing and shipment of Pima cotton have remained stable, and the cumulative signing progress is currently slow, but it is expected to accelerate in the future. [25] 3.3.3 US Trade Policy - Since 2025, the US has shifted its textile and clothing trade policy towards South Asia from high - pressure suppression to targeted concessions and raw - material binding, aiming to reshape the global cotton - textile supply chain centered on US cotton. In February 2026, the US reached tariff agreements with Bangladesh and India, reducing the benchmark tariff rate and setting up a zero - tariff mechanism for using US cotton, which will significantly enhance the export competitiveness of South Asian textiles, lock in the long - term demand for US cotton, and weaken the substitution space of Indian and Brazilian cotton. [29] 3.4 Conclusion and Operation Suggestions - For the domestic market, Zhengmian is likely to continue rising. Operators are advised to make long - term layouts based on the fundamentals, pay attention to the progress of domestic resumption of work, US cotton export sales data, and the implementation of tariff policies. The main operation idea is to buy on dips, with the upper - limit pressure reference at 16,000 yuan/ton. [1][30] - For the international market, although the USDA February supply - demand report is bearish, the outlook forum has released bullish signals. The overall situation is bullish with limited downward space. The operation suggestion is to adopt a bullish trading strategy for Zhengmian. [2][30][31]

Report Industry Investment Rating No relevant content provided. Core Viewpoints - Due to the overall positive outlook from the US Agricultural Outlook Forum during the holiday, short - term positive effects of US tariffs, improved medium - to - long - term fundamentals of Zhengzhou cotton, and the favor of funds, Zhengzhou cotton prices soared after the holiday. The main contract reached a maximum of 15,665 yuan/ton this week. Although there was a subsequent correction, it encountered resistance around 15,300 yuan/ton, showing an overall strong trend. In the medium - to - long - term, with the improvement of supply - demand fundamentals, Zhengzhou cotton still has room for growth, and it is advisable to buy on dips. In the short - term, there may be correction pressure, but the amplitude is limited. Recently, attention should be paid to the resumption of work in the downstream after the holiday and cotton - related policies [4]. Summary by Related Catalogs Global and US Cotton Supply - Demand Forecast - According to the latest forecast of the US Department of Agriculture's Agricultural Outlook Forum, in the 26/27 cotton season, the global total cotton production is expected to decrease by 3.2% year - on - year, consumption to increase by 1.2% year - on - year, and ending stocks to decrease by 5.2% year - on - year. The US cotton planting area is expected to increase by 1.3% year - on - year, the harvested area to decrease by 2.2% year - on - year, and the yield per unit to remain flat. The total US cotton production is expected to be 2.96 million tons, a year - on - year decrease of 2.3%, consumption to remain flat year - on - year, exports to increase by 1.7% year - on - year, and ending stocks to decrease by 4.5% year - on - year. China's cotton production is expected to be 32 million bales, with a consumption increase of about 1% [5]. US Cotton Export Signing - As of the week ending February 19, the weekly signing volume of 2025/26 US upland cotton was 57,400 tons, a 46% week - on - week decline (the signing volume in the week of February 12 reached a new high for the year), a 7% increase compared to the four - week average, and a 19% year - on - year decline. Among them, Bangladesh signed 16,000 tons and India 13,500 tons. The total signing volume of US cotton in the 2025/26 season accounted for 79% of the forecast, a 3 - percentage - point week - on - week increase and a 15 - percentage - point year - on - year decrease, with the decline narrowing by 1 percentage point compared to last week. The total shipment progress was 51%, a 1 - percentage - point week - on - week increase and a 3 - percentage - point year - on - year increase [7][21]. Domestic Downstream Situation - As of Thursday this week, the operating rate of yarn mills has recovered to 41%, and that of fabric mills to 36.2%. In terms of raw materials for yarn mills, the pre - holiday cotton yarn inventory of yarn mills has reached 35 days, the highest in recent years, and currently, the willingness to purchase raw materials is not strong. The current spot price difference between domestic and foreign cotton (1% tariff) is about 3,800 yuan/ton [8]. Price and Spread Information - **Futures Price Changes**: From February 13 to February 26, 2026, the price of the ZCE active contract of cotton increased from 14,740 yuan/ton to 15,350 yuan/ton, an increase of 610 yuan/ton; the price of the ICE active contract increased from 64.18 cents/pound to 65.37 cents/pound, an increase of 1.19 cents/pound [9]. - **Spot Price and Basis**: As of Thursday this week, the 328 cotton spot price index was 16,681 yuan/ton, a 562 - yuan/ton increase compared to before the holiday; the closing price of the Zhengzhou cotton main contract was 15,350 yuan/ton, a 610 - yuan/ton increase compared to before the holiday; the basis between them was 1,331 yuan/ton, a 48 - yuan/ton week - on - week expansion. The C32S yarn price index was 21,870 yuan/ton, a 350 - yuan/ton week - on - week increase; the closing price of the Zhengzhou yarn main contract was 21,255 yuan/ton, a 725 - yuan/ton week - on - week increase; the basis between them was 615 yuan/ton, a 375 - yuan/ton week - on - week expansion [48]. - **Domestic and Foreign Price Spreads**: On Thursday this week, the price difference between the domestic 328 cotton price index and the port delivery price index of imported cotton under the sliding - scale tariff was 336 yuan/ton, a 195 - yuan/ton week - on - week increase; the price difference with the port delivery price of imported cotton under the 1% tariff was 67 yuan/ton, a 104 - yuan/ton week - on - week increase. The price difference between the C32S cotton yarn price index and the port delivery price was 2,780 yuan/ton, a 3,798 - yuan/ton week - on - week increase [51]. - **Futures Spread and Processing Profit**: On Thursday this week, on the futures market, the spread between the Zhengzhou yarn main contract and the Zhengzhou cotton main contract was 5,850 yuan/ton, a 60 - yuan/ton week - on - week expansion; the immediate theoretical processing profit of 32 - count pure cotton yarn was - 2,180 yuan/ton, with the loss amplitude expanding by 325 yuan/ton week - on - week [54]. Warehouse Receipt Information - As of Thursday this week, the sum of Zhengzhou cotton warehouse receipts and valid forecasts was 12,416 sheets; the sum of Zhengzhou yarn warehouse receipts and valid forecasts was 52 sheets [62].

1. Report Industry Investment Rating - No relevant content provided 2. Core Viewpoints of the Report - The fundamentals of cotton provide some support, and cotton prices are showing a relatively strong performance. The cotton futures prices in February were mainly oscillating upwards. There are rumors of a potential production cut in the new season, which supports cotton prices. Although the downstream market has not fully resumed work, there are expectations for the "Golden March and Silver April" period, and downstream sectors may replenish inventory as they gradually resume operations, providing support to the market [5][6]. - The overall trend of cotton prices still has upward potential. It is recommended to build long positions on dips, and it is not advisable to chase the upward trend. For arbitrage and options, it is recommended to adopt a wait - and - see approach [7]. 3. Summary by Directory 3.1 First Part: Preface Summary 3.1.1 Market Review - In February, cotton futures prices were mainly oscillating upwards. The supply side changed little, and there were rumors of a production cut in the new season, which supported cotton prices. The downstream market had not fully resumed work, and although there were expectations for the "Golden March and Silver April" period, inventory replenishment was still cautious. US cotton rebounded in February, with expected production cuts according to the USDA annual meeting, and recent contract signings improved. It is expected to maintain an oscillating and slightly upward trend [5][12]. 3.1.2 Market Outlook - Fundamentally, the supply side for this season is basically determined, but there are rumors of a production cut in the new season. In 2026, the cotton - planting area in Xinjiang is expected to decrease by 2660000 mu to 36210000 mu, a reduction of 7%, which supports the market. The current commercial inventory is lower than that of the previous year, which is bullish for cotton prices. The downstream market has not fully started, but yarn prices have increased recently. Considering the upcoming "Golden March and Silver April" period, downstream sectors may replenish inventory as they gradually resume operations, providing support to the market [6]. 3.1.3 Strategy Recommendation - Unilateral: The fundamentals of cotton are still strong, and there is still upward potential in the long - term trend. It is recommended to build long positions on dips and not to chase the upward trend. - Arbitrage: Wait and see. - Options: Wait and see [7]. 3.2 Second Part: Fundamental Situation 3.2.1 Market Review - Similar to the content in the preface summary, in February, cotton futures prices were mainly oscillating upwards. The supply side changed little, and there were rumors of a production cut in the new season, which supported cotton prices. The downstream market had not fully resumed work, and although there were expectations for the "Golden March and Silver April" period, inventory replenishment was still cautious. US cotton rebounded in February, with expected production cuts according to the USDA annual meeting, and recent contract signings improved. It is expected to maintain an oscillating and slightly upward trend [12]. 3.2.2 International Market - In the 25/26 season, the global cotton production changed little, demand decreased, and the ending inventory increased. In the 26/27 season, the global cotton production is expected to decrease by 3.9 million bales to 116 million bales, slightly higher than the five - year average. The production in China, Brazil, the US, the Francophone Africa, and Greece is expected to decline, while that in Australia, Turkey, Mexico, Central Asia, and Egypt is expected to increase slightly, and India and Pakistan are expected to remain unchanged. According to the latest USDA global cotton production and sales forecast, in February, the 25/26 season's cotton production increased slightly compared to the previous month, with a decrease of 90000 tons to 26.09 million tons (China's production increased by 110000 tons), total demand decreased by 44000 tons to 25.85 million tons, and the ending inventory increased by 136000 tons to 16.35 million tons [13]. 3.2.3 United States - The US cotton production in the 25/26 season changed little, and there is a slight reduction in the new season. The new - cotton contract - signing progress is poor and at a low level compared to the same period in previous years. As of February 12, the cumulative US cotton contract - signing volume was 1.9279 million tons, a year - on - year decrease of 6.9%, and the cumulative shipment volume was 0.8941 million tons, a year - on - year increase of 6.13%. Currently, China's cumulative contract - signing volume of US cotton is 91500 tons, a year - on - year decrease of 44.35%, and the cumulative shipment volume is 117000 tons, a year - on - year decrease of 65.87%. The US Department of Agriculture will conduct a planting intention survey in early March 2026 and release the results on March 31. The 2026 US cotton planting area is expected to reach 9.4 million acres (a year - on - year increase of 1.3%), the harvested area is about 7.6 million acres, a 2% decrease from 2025. The national cotton abandonment rate is expected to reach 19%. The spring and summer weather conditions will have a significant impact on cotton planting and the total US cotton production [16][17]. 3.2.4 Other Countries - India: The cotton production in the 2026/27 season is expected to be 23.5 million bales, the same as in the 2025/26 season. Due to continuous pest problems, low prices, and insufficient precipitation, farmers have converted low - yield plots to competitive crops in the past two years. The cotton - planting area is expected to increase by 3% to 11.5 million hectares. The cotton yield per unit area in India has been stable in the past 8 years, and the 2026/27 season's yield per unit area is expected to be 445 kg per hectare, a 3% decrease from the 2025/26 season but slightly higher than the five - year average. As of January 31, 2026, compared with the previous year, the beginning inventory increased by 360000 tons, production increased by 80000 tons, imports increased by 150000 tons, domestic demand decreased by 150000 tons, exports decreased by 50000 tons, and the ending inventory increased by 800000 tons. As of January 31, 2025, the cumulative market volume of Indian cotton in the 2025/26 season was 3.75 million tons, with a market progress of 70%, a year - on - year increase of 17% [19][21]. - Brazil: As of February 21, the 2025/26 season's cotton planting in Brazil was 99.9% complete, a month - on - month increase of 3.4 percentage points, the same as the previous year and basically the same as the average of the past three years [24]. 3.2.5 Domestic Market - Supply side: As of mid - February, the national commercial cotton inventory was 5.5 million tons, a decrease of 285000 tons from half a month ago, at a high level compared to the same period in previous years and similar to the previous year. The commercial inventory in Xinjiang was 4.12 million tons, the inventory in the inland areas was 940000 tons, and the bonded - area inventory was 430000 tons. As of February 12, the cumulative sales volume of lint cotton was 4.991 million tons, a year - on - year increase of 1.881 million tons and an increase of 2.412 million tons compared to the average of the past four years. In December 2025, the imported cotton volume was 177300 tons, a year - on - year increase of 41500 tons and a month - on - month increase of 58600 tons. From January to December 2025, the cumulative imported cotton volume was 1.0659 million tons, a year - on - year decrease of 59.2%. From the 2025/26 season to date, the cumulative imported cotton volume was 480100 tons, a year - on - year increase of 2.8% [29]. - Price difference between domestic and foreign cotton: In February, the price difference between domestic and foreign cotton widened, and it is currently around 3000 yuan per ton. Currently, imported cotton has a certain advantage, but the Zhengzhou cotton price has been relatively strong recently, and it is expected that the price difference will remain at the current level in the short term [30]. - Demand side: After the Spring Festival, the downstream market gradually resumed work. The cotton price increased significantly at the beginning of the year, and the yarn price also increased, but the downstream sectors were relatively cautious. There are expectations for orders during the "Golden March and Silver April" period, which provides some support to the market. As of mid - February, the cotton industrial inventory of cotton textile enterprises was 1.0292 million tons, a month - on - month increase of 28200 tons; the yarn inventory of cotton textile enterprises was 21.32 days, and the grey - fabric inventory was 32.88 days. In December, domestic demand was fair, at a medium - to - high level compared to the same period in previous years, while external demand was average. The retail sales of clothing, footwear, and textiles in December were 166.1 billion yuan, a year - on - year increase of 0.6%. The export value of textiles and clothing was 25.992 billion US dollars, a year - on - year decrease of 7.4%. From January to December 2025, the cumulative export value of textiles and clothing was 293.767 billion US dollars, a decrease of 2.44% [31][32]. 3.3 Third Part: Future Outlook and Strategy Recommendation - Global cotton production in the 25/26 season is expected to remain around 25 - 26 million tons, at a relatively neutral level compared to previous years. In the new season, the cotton production in India in the 2026/27 season is expected to be 23.5 million bales, the same as in the 2025/26 season. The recent contract signings have improved but are still at a low level compared to the same period in previous years, and it is expected that the short - term boost to US cotton will be relatively limited. It is expected that US cotton will mostly maintain an oscillating and slightly upward trend. - In China, on the supply side, the cotton production in the 25/26 season is basically determined, and the supply is expected to remain sufficient in the short term. However, the cotton sales progress this year is relatively fast, and the imported cotton volume in the past year has been relatively small. In June, July, and August, the market may still trade on factors such as low inventory. There are rumors that the cotton - planting area in the new season will decrease. If there is no extreme climate, the yield per unit area will probably remain stable, and it is expected that the cotton production in the 26/27 season will probably decrease. On the demand side, the downstream market has not fully started, and although the yarn price has increased recently, the overall attitude is relatively cautious. Considering the upcoming "Golden March and Silver April" period, the downstream sectors may replenish inventory as they gradually resume operations, providing support to the market [57].