Cottoncandy prices edged up by 0.25% to settle at ₹56,050 amid concerns over reduced production and increased import dependency in India. India's cotton output for 2024/25 is projected to decline by 7.4% to 30.2 million bales due to reduced acreage and damage from excessive rainfall. The USDA also lowered its Indian production forecast to 30.72 million bales while reducing ending stocks to 12.38 million bales. This decline, driven by a shift in planted areas, particularly in Gujarat, is expected to cut India’s exports to 1.8 million bales from 2.85 million last year, while imports may rise to 2.5 million bales.
Domestic demand is projected to remain steady at 31.3 million bales. Globally, the USDA raised cotton production estimates by 200,000 bales for 2024/25, with increases in China, Brazil, and Argentina offsetting reductions in the U.S. and Spain. However, global trade forecasts were lowered by 500,000 bales due to reduced Chinese imports. U.S. cotton production is revised down to 14.2 million bales, reflecting hurricane damage, while ending stocks increased to 4.1 million bales.
In Rajkot's spot market, prices gained by 0.12% to ₹26,202.9. Technically, Cottoncandy is under fresh buying, with a 7.26% rise in open interest to settle at 266. Prices have immediate support at ₹55,850, with a potential test of ₹55,650 on further downside. Resistance is now likely at ₹56,200, and a break above this level could see prices testing ₹56,350.
Trading Ideas:
# Cottoncandy trading range for the day is 55650-56350.
# Cotton gains as India's cotton production in 2024/25 is likely to fall by 7.4% from a year ago.
# However upside seen limited as yarn markets face weak demand and payment constraints.
# Cotton production is projected to increase in China, Brazil, and Argentina, more than offsetting reductions in the US and Spain – USDA
# In Rajkot, a major spot market, the price ended at 26202.9 Rupees gained by 0.12 percent.
