Group 1: Report Overview - Report Date: December 26, 2025 [1] - Report Author: Xu Liang (Z0002220), Reviewed by Tang Yun (Z0002422) [2] Group 2: Sugar Market Core View - Short - term basis repair is completed, and further upward movement is difficult. With multiple factors affecting the market, the sugar price is under pressure to fall [3] Price and Spread Data - Sugar futures: SR01 closed at 5294 with a daily decline of 1.3% and a weekly increase of 2.26%; SR03 closed at 5287 with a daily increase of 0.28% and a weekly increase of 3.46%; etc [4] - Sugar basis: On December 25, 2025, the basis of Nanning - SR01 was - 24 with a daily increase of 28 and a weekly decrease of 102; etc [9] - Import price: On December 26, 2025, the in - quota price of Brazilian sugar imports was 4157 with a daily increase of 15 and a weekly increase of 75; the out - of - quota price was 5270 with a daily increase of 20 and a weekly increase of 98; etc [12] Group 3: Cotton Market Core View - In the short term, there is still hedging pressure on cotton prices to be digested. In the long term, if the supply expectation remains unchanged, the cotton supply - demand in the new year may be tight, and cotton prices have room to rise. Attention should be paid to downstream orders before the holiday [14] Price and Spread Data - Cotton and cotton yarn futures: Cotton01 closed at 14565 with an increase of 270 (1.89%); Cotton05 closed at 14535 with an increase of 280 (1.96%); etc [15] - Cotton and cotton yarn spreads: The cotton basis was 782 with a daily decrease of 242; the spread of cotton01 - 05 was 30 with a daily decrease of 10; etc [15] Group 4: Apple Market Core View - The overall trading of late Fuji inventory is slow, and transactions are mostly on - demand. Merchants' restocking is temporarily over [18] Price and Spread Data - Apple futures: AP01 closed at 9694 with a daily increase of 0.03% and a weekly increase of 1.14%; AP03 closed at 9360 with a daily increase of 0.61% and a weekly increase of 0.8%; etc [19] - Apple spreads: The spread of AP01 - 05 was 483 with a daily increase of 2.11% and a weekly increase of 16.39%; etc [19] Group 5: Red Date Market Core View - In the short term, red date prices are expected to fluctuate at a low level. In the long term, the overall supply - demand of red dates in the new year in China is loose, and prices will still be under pressure [26] Price and Spread Data - Red date futures spreads: The spread of red date futures (01 - 05) shows certain trends in different years; etc [27]

Core Insights - The agricultural commodities market is experiencing significant volatility, with various soft commodities showing contrasting trends in prices and performance [2][12][13] Sugar Market - Nearby ICE sugar futures settled Q3 at 16.10 cents per pound, reflecting a bearish trend since the November 2023 high of 28.14 cents per pound [1] - World sugar futures 11 on the Intercontinental Exchange increased by 4% in Q3 but faced a 16.41% decline over the first nine months of 2025 [1] Coffee Market - Arabica coffee futures surged by 22.2% in Q3 due to concerns over Brazilian coffee crops, with prices reaching $3.7485 per pound on September 30, 2025, and $4.0875 per pound in mid-October [4][5] - Coffee futures were the best-performing soft commodities in Q3 and since the end of 2024, with a 17.23% increase over the first nine months of 2025 [5] Cocoa Market - Cocoa futures experienced a significant decline of 27.86% in Q3 after reaching record highs of $12,931 per ton in late 2024, marking a 42.19% drop over the first nine months of 2025 [6][7] - Cocoa closed Q3 at $6,749 per metric ton and fell below $5,900 in mid-October 2025, indicating a bearish trend likely due to commodity cyclicality [7] Cotton and FCOJ Markets - Cotton futures decreased by only 0.77% in Q3 and were 3.85% lower than the 2024 closing price at the end of September 2025, settling at 65.77 cents per pound [8][9] - Frozen concentrated orange juice (FCOJ) futures gained 11.90% in Q3 but were the worst-performing soft commodity over the first three quarters, with a 51.04% decline [10][11] Market Outlook - The outlook for Q4 suggests that while coffee prices remain elevated, cocoa and FCOJ are in bearish trends, with sugar and cotton also experiencing downward pressure but at levels where commodity cyclicality may provide support [12] - The soft commodities sector has shifted from being a leader in 2024 to a laggard in 2025, with expectations of volatility influenced by weather, crop diseases, trade issues, and geopolitics [13]

Report Summary 1. Report Industry Investment Rating No information provided. 2. Core Viewpoints - Short - term domestic cotton is supported by late pricing of textile enterprises and low inventory, with the 9 - 1 spread strengthening. Some long - positions are shifted, the near - month price declines, and the far - month price has strong support. The low inventory before the new cotton listing will support the cotton price, but the terminal finished - product inventory pressure in the off - season may limit the upside, and there is also an expected high yield in the far - month. Attention should be paid to the import quota policy and the subsequent cotton destocking, as well as the change of Sino - US tariffs in August [3]. 3. Summary by Relevant Catalogs Cotton Price Forecast and Risk Management - **Price Range Forecast**: The monthly price range of cotton is predicted to be 13,600 - 14,400, with a current 20 - day rolling volatility of 0.0638 and a 3 - year historical percentile of 0.0713 [2]. - **Risk Management Strategies** - **Inventory Management**: For enterprises with high inventory worried about price drops, they can short Zhengzhou cotton futures (CF2509) at 14,200 - 14,400 with a 50% hedging ratio, and sell call options (CF509C14400) at 180 - 220 with a 75% hedging ratio [2]. - **Procurement Management**: For enterprises with low procurement inventory, they can buy Zhengzhou cotton futures (CF2509) at 13,600 - 13,700 with a 50% hedging ratio, and sell put options (CF509P13600) at 100 - 150 with a 75% hedging ratio [2]. Core Contradictions - **Positive Factors**: High tariffs have led to a significant decline in cotton imports this year, and the de - stocking of Xinjiang cotton is fast. As of July 15, the national cotton industrial and commercial inventory is 342.45 million tons, with an expected tight - balance at the end of the year. Also, late pricing of textile factories supports the cotton price [3][4]. - **Negative Factors**: Downstream gauze factories continue to reduce production, yarn prices rise with cotton prices, fabric factories replenish inventory slightly but坯布 inventory accumulates, and the terminal sales are sluggish. The new cotton in Xinjiang is in the boll - setting stage with good growth, leading to an optimistic production expectation for the new year [5]. Futures and Price Indexes - **Futures Prices**: Cotton 01 closed at 14,115 with a 0.36% increase; Cotton 05 at 14,040 with a 0.36% increase; Cotton 09 at 14,170 with a 0.07% increase; Yarn 01 at 20,280 with a 0.07% increase; Yarn 09 at 20,370 with a 0.05% increase. Yarn 05 closed at 20,250 with a - 100% change [5][6]. - **Price Spreads**: Cotton basis is 1379 with a - 24 change; Cotton 01 - 05 spread is 75 with no change; Cotton 05 - 09 spread is - 130 with a 40 change; Cotton 09 - 01 spread is 55 with a - 40 change; Cotton - yarn spread is 6190 with no change; Domestic - foreign cotton spread is 1835 with a 20 change; Domestic - foreign yarn spread is - 479 with no change [7]. - **Price Indexes**: CCI 3128B is 15,549 with a - 0.09% change; CCI 2227B is 13,659 with a - 0.04% change; CCI 2129B is 15,862 with a - 0.11% change; FCI Index S is 13,994 with a 0.52% change; FCI Index M is 13,803 with a 0.55% change; FCI Index L is 13,519 with a 0.39% change [8].

Report Summary 1. Report Industry Investment Rating No investment rating information is provided in the report. 2. Core Viewpoints - The domestic textile industry is in a consumption off - season, with poor performance in new orders, limited overall increase in summer orders, and most orders being short - term and small - scale. Some enterprises have reduced shifts and the overall operating rate is slowly declining. - Some spinning enterprises are in a state of inventory accumulation, with poor profit margins, which affects their willingness to purchase raw materials. They are cautious in raw material procurement and only replenish inventory according to actual production needs. - During the consumption off - season, the inventory reduction speed is slow, the fundamentals of old crops change little, and short - term prices will fluctuate. - There is a risk of high - temperature heat damage to cotton in the budding and flowering stage in most parts of Xinjiang, and continuous attention should be paid to the growth of new - season cotton in major producing areas and its impact on the market [2]. 3. Summary by Directory 3.1 Futures Market - Zhengzhou cotton main contract closing price: 13,465 yuan/ton, down 30 yuan; cotton yarn main contract closing price: 19,700 yuan/ton, down 35 yuan. - Cotton futures top 20 net positions: - 35,016 lots, an increase of 5,247 lots; cotton yarn futures top 20 net positions: - 32 lots, an increase of 116 lots. - Cotton main contract positions: 515,356 lots, a decrease of 9,626 lots; cotton yarn main contract positions: 21,159 lots, a decrease of 498 lots. - Cotton warehouse receipt quantity: 10,493 sheets, a decrease of 39 sheets; cotton yarn warehouse receipt quantity: 2 sheets, unchanged. - China Cotton Price Index (CCIndex: 3128B): 14,894 yuan/ton, an increase of 15 yuan; China Yarn Price Index (pure - cotton carded yarn 32S): 20,300 yuan/ton, unchanged [2]. 3.2 Spot Market - China Imported Cotton Price Index (FCIndexM: 1% tariff): 13,438 yuan/ton, unchanged; China Imported Cotton Price Index (FCIndexM: sliding - scale duty): 14,250 yuan/ton, unchanged. - Arrival price of imported cotton yarn price index (pure - cotton carded yarn 32S): 21,892 yuan/ton, an increase of 6 yuan; arrival price of imported cotton yarn price index (pure - cotton combed yarn 32S): 23,684 yuan/ton, an increase of 7 yuan [2]. 3.3 Upstream Situation - National cotton sowing area: 2,838.3 thousand hectares, an increase of 48.3 thousand hectares; national cotton output: 6.16 million tons, an increase of 540,000 tons [2]. 3.4 Industry Situation - Cotton - yarn price difference: 5,406 yuan/ton, a decrease of 15 yuan; national industrial inventory of cotton: 826,000 tons, a decrease of 7,000 tons. - Cotton import quantity (monthly): 40,000 tons, a decrease of 20,000 tons; cotton yarn import quantity (monthly): 100,000 tons, a decrease of 20,000 tons. - Imported cotton profit: 629 yuan/ton, a decrease of 12 yuan; national commercial inventory of cotton: 3.4587 million tons, a decrease of 693,900 tons [2]. 3.5 Downstream Situation - Yarn inventory days: 21.12 days, an increase of 0.14 days; grey fabric inventory days: 32.54 days, an increase of 1.37 days. - Monthly cloth output: 2.67 billion meters, a decrease of 50 million meters; monthly yarn output: 1.951 million tons, a decrease of 36,000 tons. - Monthly clothing and clothing accessories export volume: 1,357,773,700 US dollars, an increase of 197,117,900 US dollars; monthly textile yarn, fabric and product export volume: 1,263,177,300 US dollars, an increase of 5,210,900 US dollars [2]. 3.6 Option Market - Cotton at - the - money call option implied volatility: 11.65%, an increase of 3.66 percentage points; cotton at - the - money put option implied volatility: 11.66%, an increase of 3.66 percentage points. - Cotton 20 - day historical volatility: 5.64%, unchanged; cotton 60 - day historical volatility: 12.61%, a decrease of 0.02 percentage points [2]. 3.7 Industry News - According to the US Department of Agriculture's export sales report, in the week ended June 12, US current - market - year cotton export sales increased by 83,200 bales, a 38% increase from the previous week and a 23% decrease from the four - week average. Next - market - year cotton export sales increased by 274,900 bales. US cotton export shipments were 204,700 bales, a 13% decrease from the previous week and a 24% decrease from the four - week average. - Internationally, the US cotton weekly export sales report shows strong sales. The US cotton sowing progress lags behind the same period in previous years, and the crop rating has been downgraded [2].

Core Viewpoint - The easing of China-US trade tensions has led to a recovery in the commodity market, particularly in cotton futures, which have shown strong upward momentum [2][3]. Group 1: Market Reactions - Cotton futures prices have surged, with the main contract CF2509 rising by 290 yuan/ton, a 2.24% increase, breaking through the resistance level around 13,080 yuan [4]. - The optimism in the market is attributed to the recent high-level trade talks between China and the US, which exceeded market expectations and are expected to benefit China's textile and apparel exports [3][4]. Group 2: Trade Agreements - The joint statement from the China-US Geneva trade talks on May 12 indicates a temporary suspension of 24% tariffs on certain Chinese goods for 90 days, while retaining a 10% tariff [3]. - China will reciprocate by suspending similar tariffs on US goods, which is expected to boost market sentiment and cotton prices [3]. Group 3: Cotton Production and Export Data - The US cotton export data shows a significant decline in weekly contracts, down 39% from the previous week and 74% year-on-year, indicating a potential impact from high tariffs [5]. - In contrast, Brazil's cotton production is expected to increase, with a projected planting area of 2.079 million hectares, a 6.9% rise from the previous year [7]. Group 4: Domestic Demand and Supply - Domestic retail sales for clothing and textiles showed a year-on-year increase of 3.6% in March, indicating a stable demand in the domestic market [8]. - However, the textile industry faces challenges with export volumes increasing but prices declining, leading to pressure on downstream profits [8][9]. Group 5: Future Outlook - The planting area for cotton in China is expected to increase slightly, supported by price subsidy policies, while the US may see a decrease in cotton planting area by 12% [7][10]. - The market is advised to closely monitor the impact of weather conditions and trade policy developments on cotton prices in the coming months [10].