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Cotton candy

Cotton candy futures surged by 1.7% yesterday, closing at 58680, driven by robust demand for Indian cotton from countries like Bangladesh and Vietnam, among others. However, the upside was capped by sluggish milling demand and muted yarn demand in the global market. Despite these factors, there were prospects of improved crop yields in countries like Australia. The International Cotton Advisory Committee (ICAC) projected increases in cotton-producing area, production, consumption, and trade for the upcoming 2024-25 season. In India, cotton stocks are anticipated to decline by nearly 31% in 2023/24, reaching their lowest level in over three decades due to reduced production and rising consumption. Lower stockpiles are expected to constrain exports from the world's second-largest producer, supporting global prices but potentially impacting domestic textile companies' margins. For the marketing year 2024/25, India's cotton production is estimated to decrease by 2% to 25.4 million 480 lb. bales, with a shift in acreage to higher-return crops. However, mill consumption is forecasted to increase by 2%, driven by improving yarn and textile demand in major international markets. Additionally, with the recension of import duty on extra-long staple (ELS) cotton, imports are expected to rise by 20%. Technically, the cotton candy market is experiencing fresh buying, with open interest increasing by 1.84% to settle at 332 contracts, while prices surged by 980 rupees. Currently, cotton candy finds support at 57920, with potential to test 57160 if it falls below this level. On the upside, resistance is likely at 59120, with a move above potentially testing 59560. Overall, while demand remains strong, market dynamics and technical indicators will continue to shape price movements in the cotton candy futures market.

BUY COTTONCANDY JUL @ 58500 SL 58200 TGT 58900-59200. MCX

COCUDAKL

SELL COCUDAKL JUN @ 2750 SL 2790 TGT 2700-2660. NCDEX

KAPAS

BUY KAPAS APR @ 1605 SL 1590 TGT 1620-1630. NCDEX