Kedia Advisory - Cottoncandy futures closed 0.78% higher at 54,310, staging a modest rebound on short covering after recent losses driven by India’s marginal upward revision in its production estimate for the 2024–25 season. The Cotton Association of India (CAI) has raised its output projection slightly to 291.35 lakh bales from 291.30 lakh bales, mainly due to better-than-expected yields in Odisha. Despite this, domestic consumption continues to lag; the CAI’s April report cut India’s consumption estimate by 8 lakh bales to 307 lakh bales, signaling softer demand from textile mills amid muted downstream orders. India’s cotton exports are also trending lower this season, with CAI trimming its estimate by 1 lakh bale to 15 lakh bales, compared to last year’s 28.36 lakh bales, highlighting the competitive pressure in global markets and slower offtake. Imports, however, remain elevated at 33 lakh bales, more than double last season’s levels, cushioning local supply but adding to stock burdens.
Ending stocks for India are now pegged at 32.54 lakh bales, up from 30.19 lakh bales last year, indicating ample carry-forward supply into the next season. Globally, the latest USDA WASDE report shows a tighter outlook for the 2025–26 season, with world production revised down by over 800,000 bales due to cuts in India, the US, and Pakistan, even as China’s production outlook was raised by 1 million bales.
Technically, the market shows fresh buying, with open interest rising 4.92% to 64 lots, while prices gained 420. Support lies at 54,030, with a break lower likely to test 53,760. Resistance is now at 54,680, and a move above could open the door for a test of 55,060 in the coming sessions.
