Market trends 

In early December, cotton prices rose slightly. According to SunSirs' commodity market analysis system, as of December 11th, the spot price of 3128B grade cotton lint was 15,026 RMB/ton, an increase of 0.61% compared to the beginning of the month.

Futures Market: Zhengzhou cotton futures continued to fluctuate with a bullish bias. As of December 11th, the settlement price of the main Zhengzhou cotton futures contract was 13,855 RMB/ton, an increase of 85 RMB/ton from the previous day. On December 10th, the USDA supply and demand report reinforced expectations of global easing, and ICE futures digested the impact of the report, ultimately closing slightly higher, halting the continuous decline. As of December 10th, the settlement price of the main ICE cotton futures contract was 63.86 cents, a decrease of 0.77 cents from the beginning of the month.

The forecast for China's cotton consumption in the 2025/26 season has been revised upwards by 2.7%

According to the monthly supply and demand report released by the Chinese Ministry of Agriculture, due to improved prospects for U.S.-China trade, China's cotton consumption forecast for the 2025/26 season has been revised upward by 2.7% to 7.6 million tons. Production forecasts were also revised upward by 1.3% to 6.7 million tons. Consumption growth outpaced supply growth, and improved prospects for US-China trade boosted import demand, supporting cotton spot prices.

The USDA's December supply and demand report lowered its estimates for global production and consumption

According to the U.S. Department of Agriculture's December supply and demand report, global cotton production, consumption, and trade are projected to decrease slightly in the 2025/26 marketing year, while ending stocks are expected to increase compared to the previous month. Global production for 2025/26 was revised down by 64,000 tons, although U.S. production was revised upward by 34,000 tons to 3.107 million tons, with no adjustments made for other major producing countries. Global consumption for 2025/26 was revised down by 60,000 tons, with Brazilian consumption decreasing by 22,000 tons, while consumption data for other major consuming countries remained stable. Global ending stocks for 2025/26 were slightly revised upward by 9,000 tons, with China's ending stocks decreasing by 1,000 tons, U.S. ending stocks increasing by 44,000 tons, and Brazilian ending stocks increasing by 45,000 tons.

USDA December Global Cotton Monthly Report (Unit: 10,000 tons)

For the 2025/26 season, major cotton-producing countries are expected to have abundant or high yields, while global demand was generally moderate. Therefore, global supply remained relatively ample. Due to increased production and decreased consumption, the ending stocks were below the average of the past six years, indicating overall manageable pressure. Overall, this report provided limited guidance, and the market reaction had been subdued."

Market outlook:

As of December 11, cotton harvesting in Xinjiang had been completed, and most cotton companies had stopped purchasing, with only a few still conducting sporadic purchases. The fundamentals of the domestic cotton market remained largely unchanged, with supply gradually increasing and downstream textile companies maintaining a relatively stable operating rate. As the supply of ginned cotton increases, companies were generally adopting a "process and sell" strategy, resulting in manageable inventory levels. Spot prices had risen in line with futures prices, and with downstream textile companies needing to replenish their stocks as the year-end approaches, cotton prices are expected to remain stronger in the short term.

If you have any inquiries or purchasing needs, please feel free to contact SunSirs with support@sunsirs.com.