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Cotton candy

Cotton candy prices settled up by 0.04% at Rs.55,800, driven by rising demand for cotton yarn in South India, supported by a surge in garment industry orders and strong export activity. However, the cotton market faces significant supply-side challenges. India’s cotton production for the 2024/25 season is forecast to drop by 7.4% to 30.2 million bales due to reduced planted area and crop damage from excessive rainfall. The USDA also revised its India production forecast down to 30.72 million bales, further tightening supply. This decline in domestic production is expected to reduce exports and increase the need for imports, which are projected to rise to 2.5 million bales from 1.75 million bales in the previous year. With lower output in India, global cotton prices could be supported, particularly as global production estimates have been revised up by 200,000 bales, mainly due to higher output in China, Brazil, and Argentina. However, weaker production in the U.S. due to Hurricane Helene and reduced global import demand are exerting some downward pressure on the market. In India, cotton acreage has fallen by 9% year-on-year, particularly in Gujarat, where farmers opted for more profitable crops like groundnuts. As a result, demand for cotton in India is expected to remain steady at 31.3 million bales in 2024/25, despite the supply shortage. Cotton candy prices are experiencing fresh buying, with open interest increasing by 0.36% to 275 contracts, signaling bullish sentiment. Immediate support is at Rs.55,670, with further downside potential at Rs.55,530. Resistance is seen at Rs.55,980, and a break above this level could push prices towards Rs.56,150.

BUY COTTONCANDY JAN @ 55600 SL 55300 TGT 56000-56300. MCX

COCUDAKL

BUY COCUDAKL DEC @ 2700 SL 2640 TGT 2740-2760. NCDEX

KAPAS

BUY KAPAS APR @ 1530 SL 1520 TGT 1540-1560. NCDEX

COTWASOIL

BUY COTWASOIL DEC @ 1240 SL 1230 TGT 1250-1260. NCDEX