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Cotton

Cotton candy prices witnessed a decline of -0.81% yesterday, closing at 61,480, reflecting weakness in ICE prices driven by increased supply expectations and reduced demand from mills. Factors contributing to this trend include Cotton Australia's revised estimate for Australian production, anticipating a boost to at least 4.5 million bales due to favorable weather conditions. Additionally, recent U.S. cotton forecasts indicate lower production and ending stocks for the 2023/24 season, with reduced production attributed to the March 8 Cotton Ginnings report. Despite higher global production, consumption, and trade estimates, ending stocks are projected to decrease, reflecting a tighter supply-demand balance. Notably, China's increased imports offset lower estimates for other countries, contributing to higher global trade volumes. However, the Southern India Mills' Association (SIMA) has cautioned against panic buying, urging textile mills to exercise restraint amidst rising domestic cotton prices. This sentiment is echoed by the Committee on Cotton Production and Consumption, which anticipates a reduction in export demand as domestic prices approach international levels. In the spot market, prices in Rajkot, a major trading hub, ended slightly lower at 29,572.45 Rupees, indicating a broader downward trend in cotton candy prices. From a technical perspective, the market observed long liquidation, with a notable -14.16% drop in open interest alongside a significant price decrease of -500 rupees. Support for cotton candy is expected at 61,200, with a potential downside test to 60,910 levels. Conversely, resistance is likely to emerge at 61,900, with a breakthrough potentially pushing prices towards 62,310.

SELL COTTONCANDY MAR @ 61700 SL 62000 TGT 61200-61000. MCX

SELL COCUDAKL APR @ 2740 SL 2770 TGT 2680-2640. NCDEX

SELL KAPAS APR @ 1620 SL 1640 TGT 1600-1580. NCDEX