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Cotton

Cotton candy prices experienced a marginal decline of -0.2% yesterday, settling at 60480, as profit booking ensued following recent gains triggered by concerns over supply constraints and sustained cotton consumption. Notably, the U.S. cotton balance sheet for 2023/24 revealed lower ending stocks, primarily driven by higher exports and reduced mill use. This adjustment reflects a robust pace of shipments and sales, with ending stocks estimated at 2.8 million bales, constituting 20% of total disappearance. Global dynamics also contributed to market sentiment, with world cotton ending stocks decreasing by nearly 700,000 bales, mainly due to lower beginning stocks and production. While world consumption remained stable, shifts in import and export patterns influenced trade dynamics. India's cotton exports surged in February to the highest level in two years, buoyed by competitive pricing and strong demand from Asian markets like China, Bangladesh, and Vietnam. Projections indicate a potential increase in India's cotton exports for the 2023/24 marketing year, surpassing earlier expectations. However, domestic factors in India, such as a projected decline in cotton production by 7.7% compared to the previous year, present challenges for the industry. Despite this, the CAI maintains its cotton pressing estimate and provides insights into total cotton supply, consumption, and export projections, indicating a cautiously optimistic outlook. From a technical standpoint, the market witnessed long liquidation, marked by a decrease in open interest by -0.6% alongside a price decline of -120 rupees. Support levels for Cottoncandy are identified at 60140, with a potential test of 59800 levels if the downtrend persists. Conversely, resistance is anticipated at 61000, with a breakthrough potentially leading to prices testing 61520.

SELL COTTONCANDY MAR @ 60700 SL 61000 TGT 60300-60100. MCX

COCUDAKL

BUY COCUDAKL MAR @ 2540 SL 2500 TGT 2590-2630. NCDEX

KAPAS

BUY KAPAS APR @ 1550 SL 1530 TGT 1570-1580. NCDEX