The cotton market will closely watch how these factors evolve in the coming months - Kedia Advisory
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COTTON CANDY
Cottoncandy prices surged by 1.13% to settle at 61060, driven by concerns over supply from key U.S. growing regions. The U.S. Department of Agriculture (USDA) reported that 31% of the cotton crop was in good to excellent condition, with a slight decline following Hurricane Idalia's passage. China's cotton production for 2023/24 has been lowered to 5.9 million metric tons due to reduced planted areas, according to the USDA's Foreign Agricultural Service. The USDA's August WASDE report also adjusted cotton forecasts, reducing production by 2.7 million bales while increasing consumption by 500,000 bales. India faced challenges with cotton production, experiencing a 3.65 lakh hectare drop in sewing compared to the previous year. Poor monsoon conditions in Gujarat, mill closures, and low stock levels of old cotton crops contributed to tight local supplies. New cotton crops have begun arriving in parts of North and South India, with prices above the minimum support price (MSP). Early arrivals of around 3,000 bales are expected to pick up demand, especially after September 15. In Punjab, cotton arrivals have significantly dropped, with only one-third of the previous year's quantity recorded. This year, arrivals in Punjab for the 2022-23 season reached 8.7 lakh quintals, compared to 28.89 lakh quintals for the entire 2021-22 season. Overall, cotton markets are grappling with supply concerns, both in the U.S. and China, which are influencing prices. India's situation is compounded by adverse weather conditions and a drop in sewing. The cotton market will closely watch how these factors evolve in the coming months.
BUY COTTONCANDY NOV @ 61200 SL 61000 TGT 61500-61700. MCX
COCUDAKL
SELL COCUDAKL DEC @ 2650 SL 2700 TGT 2600-2560. NCDEX
KAPAS
BUY KAPAS APR @ 1580 SL 1565 TGT 1595-1610. NCDEX
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