Market Observation: Review The Data Analysis Of Cotton Market At Home And Abroad Last Month

　　2 The cotton supply side continued to maintain a loose situation in June. According to the previous processing situation, it is estimated that the cotton output of Xinjiang in this year is about 65-6.7 million tons; At the demand end, the downstream delivery of goods is maintained, and most of them are orders before the year of consumption. In some regions, there is a demand for rigid replenishment. The yarn inventory is in a low position, and the overall consumption performance is fair. On the whole, supply side easing and other favorable factors have been digested by the previous decline, and the improvement expectation of short-term demand side has driven the price center of the panel to move up slowly.

　　2 The monthly US cotton fundamentals changed little, and the overall trend was dominated by interval shocks. The US cotton output at the supply end was basically determined. The US cotton output in the USDA production and marketing report in February was not significantly adjusted; On the demand side, the contracted sales of American cotton in the current month improved, and the overall contracted progress equaled the average level of five years. The fundamental contradiction was not big and American cotton fluctuated.

Internationally, the USDA production and sales forecast for February at the supply end of this year showed a slight increase in global cotton production, with an increase of 220000 tons to 26.22 million tons compared with the previous month, which is in the middle of the past years. At present, the output in the northern hemisphere is basically determined, and it is not expected to continue to adjust in the future. According to the latest expectations of the USDA Outlook Forum in the new year, global cotton production decreased by 3.2%, consumption increased by 2.7%, and ending inventory decreased by 2.9%.

In terms of American cotton, the output of American cotton is basically determined this year, and the recent American cotton contract performance on the demand side is fair. At present, the contract progress is equal to the 5-year average, and the market focus will be on American cotton shipment in the later period. In addition, with the approaching of new cotton planting in the new year, the market began to pay attention to the planting situation in the new year. According to the latest USDA Outlook Forum, the planting area of American cotton in 2025/26 is expected to be 10 million acres, down 11% from the previous year. The reduction is less than the NCC forecast, and the output is slightly increased, which has a negative impact on the market. However, considering that USDA has placed the seed rejection rate of American cotton at a relatively low position this time, there are signs of drought in the main production area of American cotton in the recent period. If the weather problems occur in the later period, USDA may increase the seed rejection rate, which may have a positive impact on American cotton. To sum up, in the short term, the output of American cotton in this year is basically determined, while the recent contract signing of American cotton has improved. The planting area of American cotton in the new year has been reduced, but the output has increased slightly. At present, the negative factors in the panel have basically been reflected, and it is expected that the power of American cotton to continue to decline in the later period is insufficient.

On the domestic side, on the supply side, according to the data of China Cotton Information Network, the national cotton commercial inventory is at a high level in the same period over the years, and cotton supply is expected to remain loose in the short term. At present, the supply side of the market is not variable, and the market focuses on the market demand expectations after the year. Recently, downstream orders have slightly improved, yarn inventory is in a low position, and there is a demand for replenishment in the downstream, making the downstream demand slightly better, but the improvement is not significant, and it is uncertain whether it can be sustained in the future. To sum up, the market has recently improved its trading consumption expectations. On the one hand, the market is affected by macro factors, and has certain expectations for consumption in the new year. On the other hand, it is close to the "three gold and four silver". The market also has certain expectations for the small peak textile season. Therefore, it is expected that the market will still focus on the improvement of trading demand in the short term, It is expected that the short-term cotton trend will gradually move up slightly in the shock, but considering the large increase in Xinjiang cotton production this year and the uncertainty of Sino US trade relations, the upward space is expected to be relatively limited.

　 1、 International market: The global cotton output has slightly increased, and the global supply and demand structure is not contradictory.

According to the latest USDA forecast report on global cotton supply, production and marketing in February, the total global cotton output in February is expected to be 26.22 million tons, a slight increase of 220000 tons compared with the previous month; Compared with the previous month, the total consumption increased by 12000 tons to 25.245 million tons. In terms of ending inventory, the global ending inventory in February was 17.07 million tons, an increase of 110000 tons compared with the previous month. According to the forecast of global cotton in the new year, according to the latest USDA annual meeting, the global cotton output in 25/26 is expected to decrease by 25.408 million tons, a year-on-year decrease of 3%, the consumption is expected to be 25.909 million tons, a year-on-year increase of 2.7%, the ending inventory is expected to be 16.569 million tons, a year-on-year decrease of 2.9%, and the import and export both increase by 8.2% (half of the increase may come from China).

1. America: The supply side is basically determined this year, and the cumulative contracting progress of American upland cotton on the demand side is equal to the average of five years. The planting area of American cotton is expected to be reduced in the new year, and the output is slightly higher than this year.

According to the latest USDA supply and demand report, there was no significant adjustment in the US cotton output this year. In February, it was estimated that the US cotton output was 3.14 million tons, which was at the middle low position in history. According to the statistics of the United States Department of Agriculture, as of the week of February 14, 2025, the cumulative inspection volume of American upland cotton+Pima cotton is 3.16 million tons, accounting for 100.6% of the estimated annual American cotton output (the estimated annual American cotton output in 2024/25 is 3.14 million tons).

On the demand side, the sales of American cotton have improved recently. At present, the contracted volume has reached the average level of five years. As of the week of February 20, the cumulative contracted volume of American upland cotton was 2.1796 million tons, and the current cumulative shipment volume was 1.0224 million tons.

According to the NCC (National Cotton Council of the United States) planting intention survey, in 2025/26, the US cotton planting area is expected to be 9.557 million acres, down 14.5% year on year. At the end of February, the USDA Outlook Forum released the latest data. It is estimated that the planting area of American cotton will be 10 million acres in 25/26, down 11% year on year; The expected seed rejection rate in the report is 15.9%, down 10% year on year; The yield per unit area has not changed much. The report expects the yield per unit area to be 833 pounds/acre (836 pounds/acre in 24/25 years). The yield of American cotton is expected to be 3.18 million tons in 25/26 years, an increase of 1% year on year.

According to the recent weather conditions in the United States, the drought situation in Texas is slightly obvious, and it is about to enter the new cotton planting period. As of February 18, the drought degree and coverage index of the main cotton producing areas in the United States (93.0%) are 118,+63 year-on-year and - 10 month on month; The drought degree and coverage index of Texas is 167,+94 year on year and+1 month on month. The drought index of the main production areas in the United States fell month on month. The drought situation in Georgia, Mississippi, Alabama, Tennessee and North Carolina improved significantly, but Texas still remained high. It is recommended to pay attention to the subsequent weather changes in the United States.

On the whole, the output of American cotton is basically determined this year, and the recent signing of American cotton has improved. Judging from the supply and demand situation of this year, the negative factors in the early stage have basically been reflected in the panel, and it is expected that American Cotton will continue to be under motivated. However, the market has lowered its expectation on the planting area of American cotton in the new year. According to the USDA Outlook Forum, the planting area of American cotton in the new year is expected to decrease from the previous year, but the range is less than the NNC forecast, which has a negative impact on the market. However, considering that the seed rejection rate of American cotton is relatively low at present, if the weather problems occur in the later period, the seed rejection rate may be increased, which may have a positive impact on American cotton.

2. India: The production in the new year decreased slightly.

According to the latest USDA production and marketing forecast report in February, the cotton output of India in this year has not been adjusted, increased by 100000 tons compared with the previous year; On the consumer side, India's consumption in 24/25 was reduced by 100000 tons to 5.55 million tons, unchanged from last year; In terms of ending inventory, India's ending inventory is expected to be 2.18 million tons, an increase of 110000 tons month on month.

According to the latest report of the Indian Cotton Association (CAI), as of January 31, 2025, CAI has evaluated the cotton balance sheet of Indian cotton in 2024/25. Compared with the evaluation last month, the output has decreased by 40000 tons, the import has increased by 30000 tons, the export has decreased by 20000 tons, and the ending inventory has decreased by 10000 tons. Compared with the previous year, the beginning inventory increased by 20000 tons, the output decreased by 400000 tons, the import increased by 140000 tons, the domestic demand increased by 30000 tons, the export decreased by 200000 tons, and the ending inventory decreased by 70000 tons. As of February 27, the spot price of S-6 cotton in India was 53600 rupees/kandi (about 78.62 cents/pound).

The overall progress of Indian cotton listing is slightly faster than that of the same period last year. According to the statistics released by CAI, as of the week of February 24, 2025, the weekly listing volume of Indian cotton is 107000 tons, a year-on-year decrease of 66%; India's cotton market volume in 2024/25 is 3.607 million tons. The cumulative listing volume of CAI reached 70.3% of the 24/25 annual forecast balance sheet output (5.13 million tons), 6% faster than the previous year.

In a word, India's cotton output has not changed much this year, and the consumer side has shown a general performance. However, the moisture content of India's new cotton is uncertain this year. It is suggested to focus on whether India's cotton companies will adjust their quality purchase policies in the future.

2、 Domestic market: the supply side has little change in the future, and the market focuses on the demand side.

1. In the year of 24/25, the national cotton commercial inventory was at a high level, of which the commercial inventory in Xinjiang was at a high level over the same period of the past years, and the inland inventory was at a low level over the same period of the past years.

According to the latest data from China Cotton Information Network, China's cotton commercial inventory was 5.681 million tons in the middle of February; The inventory in Xinjiang is 4.52 million tons; However, the commercial inventory in the mainland is 685500 tons. Although the commercial inventory in the mainland in 24/25 was at a low level over the same period of the previous years, considering that the pure cotton spinning capacity is gradually transferred to Xinjiang, it is estimated that although the inventory in the mainland is low, the possibility of shortage is low.

2. The cotton production and processing volume of this year is at a high level over the same period of the past years.

At present, the sale of new cotton is relatively fast. According to the current processing situation, the cotton production in Xinjiang is relatively fast. According to the China Cotton Information Network, as of January 22, the cumulative processing volume of Xinjiang lint was 6.4 million tons. Later, the processing data in Xinjiang was suspended.

The progress of cotton sales is slightly slow. This year's cotton output is growing faster than expected, and the market has abundant cotton supply. Although cotton sales have increased month on month, they are at a lower position over the same period of the past years. According to the data of the national cotton monitoring system, the national cotton output is expected to be 6.677 million tons. As of February 22, 3.088 million tons of lint had been sold, a decrease of 430000 tons compared with the five-year average, and the sales progress is about 46%.

　　 3. The cotton import volume in 24/25 was relatively low, which was at a low level over the same period of the past years.

According to the latest release of the customs, China's cotton import volume in December was 130000 tons, 130000 tons less than the same period of last year, which is at a low level over the same period of previous years. From the perspective of internal and external price difference, the internal and external price difference did not change much in February, and the internal and external price difference was around 1000 yuan/ton.

The trade relationship between China and the United States may be tense. Now the market is reducing the import of cotton from the United States. Considering that the cotton production in Xinjiang has increased significantly this year but the demand performance is average, it is expected that the cotton supply gap is not large, so the cotton import volume may be low, but the Sino US trade negotiations have brought greater uncertainty to cotton import.

4. After the festival, the demand situation has slightly improved. Recently, the startup rate has recovered, but it is still mainly to digest the orders before the festival. The overall order increment is limited, and some links have been replenished.

After the Spring Festival, the downstream links gradually began to rework. Most of the orders were made before the year. At present, the overall downstream sentiment is relatively general, and they are more cautious about the future market. According to the latest data of TTEB, the current operating rate of pure cotton yarn is 54.5%, an increase of 1.9 percentage points month on month; The starting rate of grey fabric was 49.14%, an increase of 2.8 percentage points on a month on month basis. The yarn inventory of textile enterprises is currently 20.6 days, down 0.56 days month on month; Gray fabric inventory was 32.16 days, down 0.28 days month on month.

According to the data of China Cotton Information Network, as of February 15, the cotton industrial inventory of textile enterprises was 953600 tons, which was at a high level over the same period of the past years; The yarn inventory of textile enterprises is 22.18 days; The grey fabric inventory in the same period was 29.94 days, down 1.91 days month on month.

From the perspective of domestic demand and external demand, since the import and export data and the data of the National Bureau of Statistics will be released in March, the latest data is not updated in this report. However, according to the market expectation, the domestic demand in January and February is not expected to improve significantly. The domestic demand in the first two months is similar to that of last year, while the export situation is expected to be better. According to the data of the National Bureau of Statistics, the accumulated retail sales from January to December were 1469.1 billion yuan, an increase of 0.3% year on year, which was at a low level over the same period of the past years, only higher than the epidemic situation in 2020 and 2022. Although the retail sales of domestic clothing, shoes and hats, and knitted textiles will be average in 2024, if the state issues relevant policies to stimulate the consumption of clothing and home textiles in 2025, the market still has certain expectations for the consumption of 25 years.

In terms of export, the export situation in 2024 is general, but the export expectation in January and February 2025 is good. The market considers that the reason is that enterprises are scrambling for export orders. In 2024, China's export of textiles and clothing will reach 301.6 billion US dollars, up 1.1% year on year; Among them, textile exports reached US $142.11 billion, up 4.5% year on year, and clothing exports reached US $159.52 billion, down 1.7% year on year. In 2025, China's textile and clothing exports will be highly uncertain. The devaluation of RMB and the good demand of European and American countries will actually benefit exports. However, Trump will raise tariffs on our country's goods, which is not conducive to exports. Therefore, China's textile and clothing exports will be highly uncertain in 2025.

It is expected that the domestic demand in the first two months of 2025 will be general. Due to the expected good situation of scrambling for export orders, the demand in the intermediate link will be OK, the yarn inventory will be low, the price will rise, and the external demand is also expected to be OK. In addition, the domestic macro policies in the new year will stimulate consumption expectations, and in addition, there will be some expectations of "gold, silver, and four" in the small peak textile season, Therefore, the market has certain expectations for the demand in the short term. We expect that this improvement on the demand side is expected to last until March, after which the stage is to verify whether the market expectations are fulfilled.

　 Part III Future Market Outlook and Strategy Recommendation

Internationally, the USDA production and sales forecast for February at the supply end of this year showed a slight increase in global cotton production, with an increase of 220000 tons to 26.22 million tons compared with the previous month, which is in the middle of the past years. At present, the output in the northern hemisphere is basically determined, and it is not expected to continue to adjust in the future. According to the latest expectations of the USDA Outlook Forum in the new year, global cotton production decreased by 3.2%, consumption increased by 2.7%, and ending inventory decreased by 2.9%.

In terms of American cotton, the output of American cotton is basically determined this year, and the recent American cotton contract performance on the demand side is fair. At present, the contract progress is equal to the 5-year average, and the market focus will be on American cotton shipment in the later period. In addition, with the approaching of new cotton planting in the new year, the market began to pay attention to the planting situation in the new year. According to the latest USDA Outlook Forum, the planting area of American cotton in 2025/26 is expected to be 10 million acres, down 11% from the previous year. The reduction is less than the NCC forecast, and the output is slightly increased, which has a negative impact on the market. However, considering that USDA has placed the seed rejection rate of American cotton at a relatively low position this time, there are signs of drought in the main production area of American cotton in the recent period. If the weather problems occur in the later period, USDA may increase the seed rejection rate, which may have a positive impact on American cotton. To sum up, in the short term, the output of American cotton in this year is basically determined, while the recent contract signing of American cotton has improved. The planting area of American cotton in the new year has been reduced, but the output has increased slightly. At present, the negative factors in the panel have basically been reflected, and it is expected that the power of American cotton to continue to decline in the later period is insufficient.

On the domestic side, on the supply side, according to the data of China Cotton Information Network, the national cotton commercial inventory is at a high level in the same period over the years, and cotton supply is expected to remain loose in the short term. At present, the supply side of the market is not variable, and the market focuses on the market demand expectations after the year. Recently, downstream orders have slightly improved, yarn inventory is in a low position, and there is a demand for replenishment in the downstream, making the downstream demand slightly better, but the improvement is not significant, and it is uncertain whether it can be sustained in the future. To sum up, the market has recently improved its trading consumption expectations. On the one hand, the market is affected by macro factors, and has certain expectations for consumption in the new year. On the other hand, it is close to the "three gold and four silver". The market also has certain expectations for the small peak textile season. Therefore, it is expected that the market will still focus on the improvement of trading demand in the short term, It is expected that the short-term cotton trend will gradually move up slightly in the shock, but considering the large increase in Xinjiang cotton production this year and the uncertainty of Sino US trade relations, the upward space is expected to be relatively limited.