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Cotton

Cottoncandy prices rose by 0.25% to settle at 55,610, driven by concerns over India’s cotton production, which is forecasted to decline by 7.4% in 2024/25 to 30.2 million bales due to reduced planting area and crop damage from excessive rainfall. The USDA has also revised India’s cotton production estimate to 30.72 million bales and reduced ending stocks to 12.38 million bales, highlighting the impact of adverse weather and pest infestations. India’s cotton planting area has decreased significantly, with 110.49 lakh hectares sown this season, down from 121.24 lakh hectares last year, as many farmers in Gujarat shifted to groundnuts due to better returns. This production shortfall is expected to impact India’s exports, projected to fall to 1.8 million bales from 2.85 million a year ago, while imports are expected to rise to 2.5 million bales, supporting global prices. Despite this, weak demand in the yarn market and payment challenges could limit price gains. Globally, the USDA forecasts higher cotton production in countries like China, Brazil, and Argentina, offsetting declines in the U.S. and Spain. The world cotton trade has been revised lower, primarily due to reduced demand from China, while global ending stocks are forecasted at 76.3 million bales. Technically, the market is under short covering with open interest unchanged at 164 contracts and prices up by 140 rupees. Cottoncandy finds support at 55,520, with further downside likely to test 55,420 if this level is breached. Resistance is anticipated at 55,710, and a break above could push prices toward 55,800. This setup reflects both the limited domestic supply and evolving international demand, creating a balanced outlook for cotton prices.

BUY COTTONCANDY NOV @ 55500 SL 55200 TGT 56000-56300. MCX

Cocudakl

BUY COCUDAKL DEC @ 2900 SL 2850 TGT 2950-2980. NCDEX

Kapas

BUY KAPAS APR @ 1535 SL 1525 TGT 1550-1560. NCDEX