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The recent developments in the market indicate a mix of factors influencing price performance and global production dynamics. Cotton candy saw a 1.07% increase, closing at 58,820 due to USDA’s October WASDE report, which reduced U.S. cotton production for 2023/24 to 12.8 million bales. This was primarily attributed to lower yields in Texas. One significant shift highlighted in the report is Brazil’s cotton production in 2023/24, which is expected to surpass that of the United States, marking the first time this has occurred.
Furthermore, Brazil is on the verge of surpassing U.S. cotton exports for the first time since the 19th century. Australia also made its mark in cotton exports, with shipments to China surging to 61,319 metric tons worth $130 million in August, the highest since July 2014. This was a result of improved trade relations between the two nations. On the domestic front, the Cotton Association of India (CAI) updated its crop production estimate for the 2022-23 season, increasing it slightly to 31.8 million bales, contrasting with the government’s estimate of 34.3 million bales. This revision was based on data from various sources and stakeholders. Looking ahead, India is expected to produce 330-340 lakh bales of cotton in the 2023-2024 season. Factors such as sowing surpassing 12.7 million hectares and anticipated normal rainfall play a role in this projection.
In the technical analysis, the cotton market witnessed short covering as open interest dropped by -0.93% while prices increased by 620 rupees. Cottoncandy’s support level is at 58,500, with a potential test of 58,170, and resistance is likely at 59,080, with a potential price test of 59,330.
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