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Cotton

Cotton prices experienced a decline of -0.8% yesterday, settling at 62040 rupees per candy, driven by several factors impacting the global cotton market. The Cotton Association of India (CAI) revised its cotton production estimates upwards for the current season, projecting a higher production of 309.70 lakh bales compared to the previous estimate of 294.1 lakh bales. This upward revision, along with increased supply expectations globally, contributed to the downward pressure on prices. In addition to the higher production estimates in India, Cotton Australia raised its production forecast to "at least" 4.5 million bales, benefiting from widespread rainfall. However, U.S. cotton production forecasts for the current season were reduced, based on the March 8 Cotton Ginnings report, leading to lower ending stocks. Despite these adjustments, global cotton supply and demand estimates for 2023/24 showed higher production, consumption, and trade, but lower ending stocks. Furthermore, the Southern India Mills’ Association (SIMA) urged textile mills in the southern States to refrain from panic buying, highlighting the recent hike in domestic cotton prices. The price of the widely-used Shankar - 6 variety of cotton surged from ?55,300 to almost ?62,000 a candy in the span of two weeks. Capacity utilization at mills increased to 80%-90%, with around 20 lakh bales already contracted for exports. From a technical perspective, the cotton market witnessed fresh selling, indicated by a notable increase in open interest by 11.04% alongside a significant price decline of -500 rupees. Presently, cotton finds support at 61680 rupees, with potential downside testing at 61330 rupees. Resistance levels are likely to be encountered at 62600 rupees, and a breakout above this level could lead to prices testing 63170 rupees.

SELL COTTONCANDY MAY @ 60000 SL 60300 TGT 59600-59400. MCX

BUY COCUDAKL APR @ 2630 SL 2600 TGT 2670-2700. NCDEX

BUY KAPAS APR @ 1540 SL 1520 TGT 1560-1570. NCDEX