Cotton candy prices closed down by -0.23% at 60,840 due to profit booking, triggered by concerns about China's demand, a major buyer. U.S. cotton projections for 2023/24 show higher beginning stocks but lower production, exports, and ending stocks. Unexpectedly large warehouse stocks in July 2023 also contributed to higher beginning stocks for 2022/23. The U.S. production forecast for 2023/24 dropped by 860,000 bales, primarily in the Southeast and Southwest.
Consumption remains unchanged from August, while exports decreased by 200,000 bales, resulting in 100,000 bales lower ending stocks. The season-average price for upland cotton in 2023/24 is projected at 80 cents per pound, up 1 cent from the previous month. Globally, cotton projections for 2023/24 include lower beginning stocks, production, consumption, trade, and ending stocks compared to the previous month. In India, cotton sowing has decreased by 3.65 lakh hectares compared to the previous year due to poor monsoon conditions in Gujarat, mill closures, and low stock of old cotton crops. The new cotton crop has started arriving in parts of North and South India with prices above the minimum support price (MSP). Arrivals are expected to increase after September 15. Cotton picking is set to gain momentum in Telangana by the second or third week of November.
From a technical perspective, fresh selling is observed as open interest increased by 1.04% to settle at 97. Prices dropped by -140 rupees. Key support for Cotton Candy is at 60,660, potentially testing 60,490 if breached. Resistance is likely at 61,000, with a possible test of 61,170 if prices move above this level.
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