Cotton prices, represented as "Cotton candy," experienced a notable decline of -0.85%, closing at 60,540. This drop is in line with the global cotton industry's challenges, which are facing reductions in production and consumption for the 2023-24 outlook. In the U.S., projections show lower cotton production and exports, leading to decreased ending stocks. The season-average price for upland cotton in the U.S. is projected to be 80 cents per pound.
India is grappling with a 3.65 lakh hectare decrease in cotton sowing, primarily due to poor monsoon conditions in Gujarat and the closure of major mills. The new cotton crop has started arriving in parts of North and South India, with prices currently above the minimum support price. Cotton picking in Telangana is expected to gain momentum in the coming weeks. The pre-sowing price forecast for cotton in 2023-24 anticipates normal rainfall and increased crop area. In the major spot market of Rajkot, cotton prices closed at 29,268.45 Rupees, marking a decline of -0.32%.
From a technical standpoint, the market is undergoing long liquidation, with unchanged open interest at 99 contracts and a substantial decrease of -520 Rupees in prices. Cotton candy is currently supported at 60,320, with potential further testing at 60,090. Resistance is likely at 60,780, with a potential breakout leading to prices testing 61,010.
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