Cottoncandy prices rose by 0.2% to settle at ₹54,480, supported by concerns over lower production in India. The USDA has revised India’s cotton production forecast for 2024/25 down by 7.4% to 30.72 million bales due to excessive rainfall and pest issues. Acreage under cotton cultivation fell by 9% to 11.29 million hectares, with farmers in Gujarat opting for groundnuts, which offered better returns. This reduction in production is expected to drive India’s cotton imports up to 2.5 million bales, compared to 1.75 million bales last year, while exports may decline to 1.8 million bales from 2.85 million bales.
Globally, the USDA raised cotton production estimates by 200,000 bales, with gains in China, Brazil, and Argentina offsetting declines in the U.S. and Spain. U.S. cotton production is forecasted at 14.2 million bales, down over 300,000 bales due to Hurricane Helene, while exports are reduced to 11.5 million bales due to weaker global demand. World ending stocks are projected at 76.3 million bales, slightly reduced from the previous month. In Rajkot, a key spot market, prices declined by 0.41% to ₹25,814.95.
Technically, the market is witnessing short covering with open interest dropping by 11.39% to settle at 140 contracts. Cottoncandy prices are finding support at ₹54,120, with a potential dip to ₹53,770. On the upside, resistance is seen at ₹54,710, and a move above this level could lead to prices testing ₹54,950.
Trading Ideas:
# Cottoncandy trading range for the day is 53770-54950.
# Cotton gains as India's cotton production in 2024/25 is likely to fall by 7.4% from a year ago to 30.2 million bales.
# Cotton production is projected to increase in China, Brazil, and Argentina, more than offsetting reductions in the US and Spain – USDA
# USDA has lowered India's cotton production forecast for the 2024-25 season to 30.72 million bales
# In Rajkot, a major spot market, the price ended at 25814.95 Rupees dropped by -0.41 percent.