The cotton market saw a slight dip of -0.17% yesterday, settling at 60,000 due to profit booking. This followed a surge in prices driven by reports of a pink bollworm attack in the cotton belt of Haryana, causing concerns about production. The global cotton industry is facing challenges, with reductions in both production and consumption predicted for the 2023-24 season. In the U.S., the outlook for cotton shows higher beginning stocks but lower production, exports, and ending stocks for the 2023/24 season. The production forecast is down by 860,000 bales, mainly in the Southeast and Southwest regions. Exports are expected to decrease by 200,000 bales, and ending stocks are projected to be 100,000 bales lower.
The season-average price for upland cotton in 2023/24 is estimated at 80 cents per pound, up by 1 cent from the previous month. On a global scale, the cotton outlook for 2023/24 includes lower beginning stocks, production, consumption, trade, and ending stocks compared to the previous month’s estimates. In India, the 2023-2024 cotton season is expected to yield between 330 lakh to 340 lakh bales, with a substantial cotton sowing area of 12.7 million hectares. The current season has seen 335 lakh bales of cotton entering the market, with more expected in the coming days. Cotton prices in Rajkot, a major spot market, ended at 28,696.6 Rupees, representing a -0.7 per cent decrease.
From a technical standpoint, the market has witnessed long liquidation, with a drop in open interest by -0.89% to settle at 111. Prices have decreased by -100 rupees. Key support levels for Cottoncandy are at 59,900 and 59,800, while resistance is expected at 60,100 and a move above may lead to testing 60,200 levels.
Source : Investing.com