Cotton dropped as the harvest season for the natural fiber progressed

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Cotton dropped as the harvest season for the natural fiber progressed
Credit: © Reuters.

Cotton candy experienced a -1.14% decrease, settling at 57300, largely due to concerns about demand from China, the top consumer, as the harvest season progressed. India's anticipated 7.5% decline in cotton production for 2023/24, primarily influenced by reduced planted area and weather impacts from El Nino, has led to estimates of increased imports. The USDA's October WASDE report highlighted reduced U.S. cotton production to 12.8 million bales in 2023/24, citing lower yields in Texas.

Brazil is predicted to exceed U.S. cotton production for the first time, potentially overtaking U.S. cotton exports, marking a significant shift in the cotton market dynamics. Australian cotton exports to China surged in August, showcasing a significant volume not seen since July 2014, signalling improved trade relations between the countries. The Cotton Association of India adjusted its 2022-23 crop production estimate to 31.8 million bales, differing from the government's estimates and prior industry projections. Additionally, India foresees production between 330-340 lakh bales in the 2023-2024 cotton season.

In the market, there was fresh selling observed, with a 3.09% rise in open interest and a price drop of -660 rupees. Support levels are identified at 57080, possibly testing 56850, while resistance is expected at 57580, potentially leading to prices testing 57850 if surpassed.

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