CT SPECIALIST · Softs / China Supply
Z3414 – [CT] CHIRPS China Xinjiang Precipitation Signal
CHIRPS 30-day precipitation over Xinjiang captures moisture stress on 80 percent of Chinese cotton production and transmits to Cotton forward 60-day returns via the global-supply channel.
At a glance
DORMANT · WAITING FOR MAY
Current reading
+0.756
SEASONAL STATE
DORMANT · WAITING FOR MAY
Xinjiang cotton growing season runs May through September; off-season precipitation has…
Signal state
Precip Above Trend
40 days in Healthy phase
Updated
Nov 04, 2026
CHIRPS daily release
Sample
36-year window
Daily cadence; 1990 onward
As of Nov 04, 2026. Updated nightly. · NEXT WINDOW MAY-SEP XINJIANG COTTON GROWING SEASON
SIGNAL OVERVIEW
China is the largest cotton producer globally and Xinjiang province grows approximately 80 percent of Chinese cotton. The CHIRPS satellite-rain-gauge blended precipitation product provides daily 5-kilometer-resolution rainfall estimates over Xinjiang with a multi-decade record. Moisture during the May through September Xinjiang cotton growing season directly determines yield and lint quality. Daily Spearman IC against Cotton forward 60-day returns is plus 0.135 at p-value 1.8e-37 across 8,953 observations, among the strongest signals in the Cotton library. Phase plus 1 firings deliver plus 1.19 pp above baseline. Phase minus 1 firings deliver minus 1.47 pp. 2.66 pp directional spread with non-overlap IC plus 0.134 p-value 0.10 borderline significant.
LIVE CHART
CT CHIRPS China Xinjiang Precipitation Signal
What the chart is showing right now. The dark line is CHIRPS 30-day cumulative precipitation over the Xinjiang cotton-producing region z-scored on a rolling window and tanh-bounded. Positive composite means above-trend Xinjiang precipitation; negative composite means deficit. The bronze line in the middle panel is ICE US Cotton No. 2 first-nearby. The bottom panel tracks the trailing 252-day Spearman information coefficient between the composite and Cotton forward 60-day returns.
COMPOSITE
+0.756 / tanh
STATE
Precip Above Trend
PHASE
+1.05
PHASE +1 EDGE
+1.19 pp
PHASE -1 EDGE
-1.47 pp
TODAY’S PLAYBOOK READING
STATE
Extreme Pos
STATE AND HISTORY
Precip Above Trend firing at composite +0.756, 40 trading days running in HEALTHY phase. Phase +1 (Precip Above Trend) delivers plus 2.16 percent fwd60d / plus 1.19 pp above plus 0.97 percent baseline. Phase -1 (Precip Deficit) delivers minus 0.50 percent / minus 1.47 pp below baseline. Daily Spearman IC plus 0.135 at p-value 1.8e-37 strongly significant.
THE CHINA SUPPLY MECHANISM
China is the world largest cotton producer and Xinjiang grows roughly 80 percent of Chinese cotton. CHIRPS daily precipitation at 5-kilometer resolution is the cleanest observational read on Xinjiang moisture conditions. Growing-season precipitation directly determines yield and lint quality in the arid Xinjiang basin.
HOW TO POSITION
Directional moisture overlay for Cotton via the Chinese supply channel. Precip Above Trend firings flag bullish setups via supply-plus-flood-disruption; Precip Deficit firings flag bearish regimes via supply-support-from-irrigation-stability. Pair with US Cotton Belt DSCI, India Vidarbha GRACE, and CFTC positioning.
WHAT THE CHART SHOWS
The composite sits at +0.756 in the Precip Above Trend band. CHIRPS 30-day precipitation over Xinjiang is running deeply above the rolling z-score mean through 2026.
TOP INPUTS FIRING
- Primary composite +0.756 State Precip Above Trend, 40 days running in HEALTHY phase.
- CHIRPS Xinjiang 30-day deeply positive Raw z-score +1.05; CHIRPS precipitation anomaly over Xinjiang has run multiple standard deviations above the rolling mean through 2026.
- Daily IC strongly significant, non-overlap borderline Daily Spearman IC plus 0.135 at p-value 1.8e-37 strongly significant on full distribution. Non-overlap IC plus 0.134 at p-value 0.10 borderline significant on 150 samples.
THE TAKEAWAY
What this means for you today
THE CHINA SUPPLY CALL
Composite +0.756, Precip Above Trend. CHIRPS 30-day precipitation over Xinjiang is running deeply above the rolling z-score mean through 2026 with raw z at plus 1.05. Signal firing in Precip Above Trend bucket for 40 days; forward 60-day edge in Phase +1 historically runs plus 1.19 pp above baseline.
THE EMPIRICAL CONTEXT
Daily IC plus 0.135 at p-value 1.8e-37 strongly significant on 36-year sample. Phase +1 (Precip Above Trend) delivers plus 1.19 pp above baseline; Phase -1 (Precip Deficit) delivers minus 1.47 pp. 2.66 pp directional spread with clean monotone pattern between the extremes.
THE HONEST CAVEAT
Non-overlap IC at 60-day sampling plus 0.134 at p-value 0.10 borderline significant on 150 samples. Signal is seasonal (Xinjiang cotton growing season May-September); off-season composite ffills forward. Excess precipitation in arid Xinjiang can signal flood-disruption rather than pure yield support making Phase +1 interpretation more nuanced than naive wet-is-bullish.
THE REGIME MAP
The three phases, forward returns and sample share
Computed from 8,953 post-warmup trading days (1990 onward). Baseline Cotton fwd60d mean plus 0.97 percent. Phase +1 (Precip Above Trend) delivers +1.19 pp edge; Phase -1 (Precip Deficit) delivers -1.47 pp. 2.66 pp directional spread with daily IC plus 0.135 strongly significant.
| State | Phase | Share | Fwd 60d | HAC t | Edge vs baseline | Last firings |
|---|---|---|---|---|---|---|
| Precip Above Trend TODAY | +1 | 53.3% (4772 d) | +2.16% | +1.19pp | 2026 (current), 2022, 2016 | |
| On Trend | 0 | 18.6% (1664 d) | -0.24% | -1.21pp | various | |
| Precip Deficit | -1 | 28.1% (2517 d) | -0.50% | -1.47pp | 2017-18, 2014, 2008-09 |
The historical pattern
Signature episodes in the 36-year sample
What this measures
Z-score of CHIRPS 30-day cumulative precipitation over the Xinjiang cotton-producing region on a rolling window, tanh-bounded. Positive composite equals above-trend Xinjiang precipitation (bullish CT via two-channel transmission); negative composite equals deficit precipitation (bearish CT buffered by snowmelt irrigation). Target ICE US Cotton No. 2 first-nearby back-adjusted close.
Why it matters
Why Xinjiang precipitation matters
China is the world largest cotton producer and Xinjiang grows roughly 80 percent of Chinese cotton. CHIRPS satellite-rain-gauge blended precipitation at 5-kilometer daily resolution is the cleanest observational read on Xinjiang moisture conditions. Growing-season precipitation directly determines yield and lint quality in the arid Xinjiang basin where cotton production depends on both snowmelt-fed irrigation infrastructure and additional growing-season rainfall.
How to use this signal today
Directional moisture overlay for Cotton via the Chinese supply channel. Precip Above Trend firings flag bullish setups (both supply-support and flood-disruption interpretations are consistent with the empirical); Precip Deficit firings flag bearish regimes. Pair with US Cotton Belt DSCI, India Vidarbha GRACE, USDA WASDE stocks-to-use, and CFTC positioning for stacked global- supply conviction.
Risk overlay
Daily IC strongly significant but non-overlap test (150 independent 60-day samples) plus 0.134 at p-value 0.10 borderline significant. Signal is seasonal (Xinjiang cotton growing season May- September); off-season composite ffills forward. Excess precipitation in arid Xinjiang can signal flood-disruption rather than pure yield support making Phase +1 interpretation two-channel.
Signal consumers and siblings
Not investment advice · The analysis on this page is informational and educational. Signal readings, historical case figures, and empirical statistics are derived from publicly available data and are provided without warranty. Hypothetical performance results have inherent limitations, including the benefit of hindsight. Readers who intend to trade should consult a licensed investment professional and see the research brief for the full disclaimer.
Last refreshed Nov 06, 2026 06:30 AM ET