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Cotton

Cottoncandy prices edged up by 0.47%, closing at ?57,470, supported by concerns over reduced acreage and tighter supply projections for the current kharif cropping season. The acreage under cotton has declined by approximately 9% to 110.49 lakh hectares (lh) compared to 121.24 lh in the same period last year. The Cotton Association of India (CAI) estimates that the total acreage will be around 113 lh this year, down from 127 lh the previous year. This decline is primarily attributed to farmers shifting to other crops due to lower yields and higher production costs. The CAI also highlighted a potential tightness in the cotton balance sheet for the upcoming season due to higher-than-expected exports, particularly to Bangladesh, which have surged from 15 lakh bales to 28 lakh bales. India's cotton production and consumption for 2023-24 are both estimated at around 325 lakh bales. With exports at 28 lakh bales and imports at 13 lakh bales, the gap will be filled by drawing from last year's stock. In terms of global cotton production, the 2024/25 balance sheet has seen reductions in production, consumption, and stock levels, largely due to lower output in the United States and India. Global ending stocks are reduced by 5.0 million bales to 77.6 million, reflecting the overall tightness in the market. Technically, the market is under short covering, as indicated by a 0.57% drop in open interest, settling at 175 contracts while prices increased by ?270. Cottoncandy finds support at ?57,390, with a potential test of ?57,320 if this level is breached. On the upside, resistance is expected at ?57,540, and a move above this level could push prices towards ?57,620.

BUY COTTONCANDY SEP @ 57000 SL 56700 TGT 57500-57800. MCX

Cocudakl

SELL COCUDAKL SEP @ 3380 SL 3430 TGT 3320-3280. NCDEX

Kapas

SELL KAPAS APR @ 1610 SL 1625 TGT 1590-1580. NCDEX