Cotton candy futures experienced a notable uptick of 0.41% in the latest trading session, settling at 58,620. This gain can be attributed to significant developments in the market, as outlined in the October WASDE report from the USDA. The report revealed a substantial cut in U.S. cotton production for the 2023/24 season, projecting a reduced output of 12.8 million bales. One of the most striking insights from the USDA report is the projection that Brazil’s cotton production in 2023/24 is set to surpass that of the United States for the first time in history. Furthermore, it is anticipated that Brazil is on the brink of exceeding U.S. cotton exports, marking a significant shift from historical trends dating back to the 19th century. Australia’s cotton exports to China saw a substantial increase in August, reaching 61,319 metric tons valued at $130 million.
The Cotton Association of India (CAI) also released its final estimate for the 2022-23 cotton crop, revising it upward to 31.8 million bales, compared to initial estimates of 34.4 million bales. This contrasted with the government’s third advance estimate of 34.3 million bales for the 2022-23 season and the industry’s production estimate of 29.9 million bales for the previous season. CAI’s revised estimate takes into account data from various sources and stakeholders, indicating the complexity of estimating cotton production accurately.
In terms of technical analysis, the cotton market is currently witnessing fresh buying momentum. Open interest increased by 0.88% to 115, while prices surged by 240 rupees. Key support levels for Cottoncandy are at 58,360 and 58,110, with resistance likely to be encountered at 58,920 and, if breached, could lead to testing the 59,230 level. The technical indicators indicate a positive sentiment in the market, potentially paving the way for further price appreciation.