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].