【Wdoodoo Weekly Cotton Report】Domestic new cotton planting completed; domestic and overseas cotton maintain a strong bias.

Zhengzhou cotton trended bullish and fluctuated last week. CF09 closed at 16,555 yuan/ton, up 360 yuan/ton from the previous period; Cotton 3128B closed at 17,525 yuan/ton, rising 245 yuan/ton month-on-month. Falling planting willingness and speculation over U.S. drought have entered a heated stage. However, as May arrives, caution is needed regarding actual planting progress in China and the U.S. as well as demand performance in the off-season.

1. Bullish Macroeconomic Support

The U.S. promotes the “Freedom Plan” to reopen the strait and resume navigation in the Strait of Hormuz through multilateral coordination mechanisms. It aims to maintain strategic deterrence while preventing a major conflict escalation. Recent frequent high-level interactions between China and the U.S. pave the way for a leaders’ summit. The overall macro backdrop delivers bullish sentiment to the cotton market.

2. U.S. Drought Persists; Xinjiang Planting Cut Slightly Below Expectations

Weather in producing regions remains the core driver for overseas cotton markets. Despite rainfall in some U.S. cotton areas, drought conditions in major producing regions deteriorated marginally. Concerns over new U.S. cotton supply continue to underpin ICE cotton futures. Meanwhile, latest weekly U.S. cotton export data rebounded moderately, leaving U.S. cotton prone to gains and resistant to declines in the short run.

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Domestically, cotton sowing in Xinjiang is nearly completed. The actual planting area is expected to drop by around 3.8%, while yield per unit area is projected to rise. As a result, output is forecast to stay above 7 million tons, with the reduction margin slightly below market expectations.

Notably, according to the May global supply and demand forecast released by the International Cotton Advisory Committee (ICAC), global cotton output in 2026/27 is estimated at 25.9 million tons and consumption at 25.2 million tons. The fundamental pattern has shifted from a tight balance to a supply surplus.

3，需求支撑坚韧，但终端存在隐忧。

Current comprehensive yarn operating rate and pure cotton grey fabric operating rate stayed stable overall. Inventories of pure cotton yarn and grey fabric edged up month-on-month but remained at relatively low levels in recent years. Terminal consumption stayed resilient, and high industrial capacity kept cotton consumption at a high level, maintaining a tight supply-demand balance and offering solid support for cotton prices.

Nevertheless, the sharp rally in cotton prices continued to squeeze spinning mill profits and weakened their willingness to purchase raw materials. Some current orders at mills stem from speculative demand of traders. With the arrival of the May–June off-season, demand support is likely to soften.

China’s cumulative imports of cotton and cotton yarn both exceeded 50,000 tons from January to March, surging over 50% year-on-year. In 2026/27, China’s cotton imports are expected to rise to 1.7 million tons, up 50% year-on-year. However, cumulative textile and apparel exports in the first quarter reached 67.08 billion U.S. dollars, a modest year-on-year increase of around 1.2%. The sharp expansion in cotton and cotton yarn imports contrasts weakly with export growth, requiring close attention to textile demand changes in the off-season.

Overall, domestic and overseas cotton markets maintained a firm trend. U.S. drought during the planting season and policy-driven planting cuts in Xinjiang remain the core speculative themes. Yet the actual reduction in Xinjiang cotton planting fell short of expectations, and sharp short-term price gains may trigger policy adjustments such as state reserve sales. As the off-season approaches, marginal bullish momentum is set to fade, and the most definitive rally phase may have passed.

Short-term focus on the 16,500 yuan level. Hold bullish positions above this level without chasing highs, and take profits gradually on rallies. In the medium to long term, the speculation over new-crop output cuts at home and abroad for 26/27 is hard to disprove, and the supply-demand gap may widen further. The long-term cotton price center is likely to move upward. Zhengzhou Cotton 09 maintains a daily and weekly bullish structure above 15,800 yuan, with dips suitable for long participation.

Weekly Focus

1.Sustainability of geopolitical conflicts in the Middle East

2.Evolution of U.S. drought conditions

3.Terminal demand performance