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Cotton Dropped On Profit Booking Amidst Low Demand And Cautious Buying From Mills.

Published 30-09-2024, 11:10 am
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Cotton candy prices settled lower by -0.7% at 58,080 due to profit booking, as well as subdued demand and cautious buying from mills. The USDA recently lowered India's cotton production forecast for the 2024-25 season to 30.72 million bales, citing crop damage from excessive rains and pest issues. Additionally, ending stocks were reduced to 12.38 million bales. Acreage under cotton cultivation for the current kharif season has dropped by 9% to 110.49 lakh hectares compared to 121.24 lakh hectares during the same period last year. Cotton exports for the 2023-24 season are expected to increase by 80%, reaching 28 lakh bales due to higher demand from countries like Bangladesh and Vietnam.


In comparison, exports during the previous crop year were 15.50 lakh bales. According to the Cotton Association of India (CAI), exports till August reached 27 lakh bales, while imports increased to 16.40 lakh bales, up from 12.50 lakh bales in the previous year. Closing stocks for the current season are projected at 23.32 lakh bales, lower than the 28.90 lakh bales reported last year. On the U.S. front, the cotton balance sheet for 2024/25 reflects lower production, exports, and ending stocks. U.S. production is forecasted at 14.5 million bales, down by 600,000 bales from August due to lower yields in the Southwest. Globally, cotton production is estimated to decline by 1.2 million bales, with reductions in India, Pakistan, and the U.S. offset by a larger crop in China. World trade and consumption are also forecasted to drop.


Technically, Cottoncandy is under fresh selling pressure, with a 1.87% increase in open interest. Prices have support at 57,830, with a further drop potentially testing 57,590. Resistance is likely at 58,380, and a break above this level could see prices test 58,690.

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