The cotton market experienced a marginal decline of -0.28% to settle at 57340, driven by profit booking following earlier support from India’s anticipated 7.5% decrease in cotton production for 2023/24. Factors such as lower planted areas and the impact of El Nino weather conditions contributed to this decline. The Cotton Association of India (CAI) foresees an increase in imports to 2.2 million bales, up from the previous year’s 1.25 million bales. In the U.S., the 2023/24 cotton balance sheet shows slightly lower consumption but higher production and ending stocks.
The global cotton balance sheet for the same period indicates reduced consumption but higher production and stocks. India’s 2022/23 production saw a 300,000-bale increase, according to the CAI. Despite the organization’s final estimate for the 2022-23 season being slightly higher at 31.8 million bales, there is a notable disparity compared to the government’s third advance estimate of 34.3 million bales. North Maharashtra faces a 25% decline in cotton production due to insufficient rainfall, with output potentially dropping to 15 lakh tonnes. In Rajkot, a significant spot market, cotton prices dropped to 26908 Rupees, marking a -0.2% decrease.
From a technical perspective, the market is undergoing long liquidation, evidenced by a -4.76% drop in open interest to settle at 100. With prices down -160 rupees, support for Cotton candy is identified at 57200, with a potential test of 57060. Resistance is anticipated at 57480, and a move above could lead to a testing of 57620 levels.
Source: Investing.com
