Cotton prices dropped due to profit booking.

  • Kedia Advisory
  • Commodities News
Cotton prices dropped due to profit booking.
Credit: © Reuters.

Cotton candy prices experienced a slight dip of -0.49% to 60,780 due to profit booking following earlier gains driven by reports of a pink bollworm attack in Haryana's cotton belt. Globally, the cotton industry is grappling with reduced production and consumption in the 2023-24 outlook. In the U.S., the 2023/24 cotton projections indicate higher starting stocks but lower production, exports, and ending stocks. Unexpectedly large warehouse stocks for July 31, 2023, led to an increase in beginning stocks for 2022/23. U.S. cotton production for 2023/24 is forecasted to be 860,000 bales lower, with the Southeast and Southwest regions showing the most significant decline.

While consumption remains unchanged from August, exports are down by 200,000 bales, and ending stocks are 100,000 bales lower. Globally, the 2023/24 world cotton projections show lower starting stocks, production, consumption, trade, and ending stocks compared to the previous month's report. India is expected to produce 330 to 340 lakh bales of cotton in the 2023-2024 season starting October 1, with sowing already surpassing 12.7 million hectares. In the current season, 335 lakh bales of cotton have entered the market. The cotton area in Telangana faced challenges due to unfavourable seasonal conditions, but picking is set to gain momentum in November.  

Technically, the cotton candy market saw long liquidation with unchanged open interest at 116. Prices dropped by -300 rupees. Support is at 60,460, with potential testing of 60,150 on the downside. Resistance is likely at 61,040, and a breakout could lead to testing at 61,310.

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