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Cotton candy

Cotton candy prices rose by 0.68% to settle at Rs.56,200, supported by concerns over declining production and supply constraints. India's cotton output for the 2024/25 season is projected to drop by 7.4% to 30.2 million bales, attributed to reduced acreage and damage from excessive rainfall. USDA further reduced India’s production forecast to 30.72 million bales, lowering ending stocks to 12.38 million bales. Acreage has fallen by 9%, with the planted area decreasing to 11.29 million hectares from 12.69 million hectares last year. Farmers in Gujarat have shifted focus to groundnuts, which offer better returns. India’s cotton imports are likely to rise to 2.5 million bales from 1.75 million bales a year ago, while exports are expected to decline to 1.8 million bales from 2.85 million bales, according to the Cotton Association of India (CAI). Demand, however, remains steady at 31.3 million bales. Globally, the USDA raised cotton production estimates by over 200,000 bales due to increases in China, Brazil, and Argentina, offsetting declines in the U.S. and Spain. The U.S. cotton balance sheet reflected reduced production, mill use, and exports, with ending stocks raised slightly to 4.1 million bales. The market witnessed fresh buying with a 17.01% rise in open interest, settling at 227 contracts. Prices are supported at Rs.55,960, with the next test likely at Rs.55,730. Resistance is at Rs.56,360, and a move above this could push prices to Rs.56,530. The outlook remains positive amid tight supply expectations.

BUY COTTONCANDY JAN @ 56000 SL 55600 TGT 56400-56700. MCX

COCUDAKL

BUY COCUDAKL DEC @ 2650 SL 2610 TGT 2700-2740. NCDEX

KAPAS

BUY KAPAS APR @ 1530 SL 1515 TGT 1545-1555. NCDEX

COTWASOIL

SELL COTWASOIL DEC @ 1245 SL 1260 TGT 1230-1220. NCDEX