Cotton candy prices down slightly after recent gains.

Cotton candy prices fell slightly yesterday, settling at 58,560 points, after a period of growth driven by concerns about cotton supply and strong demand. This decline is attributed to profit booking, where investors sell off their holdings after recent gains.

The latest US cotton balance sheet shows lower ending stocks than previously expected, due to higher exports and lower mill use. However, this report also revised the export forecast upwards, reflecting strong sales and shipments.

Globally, cotton ending stocks are decreasing due to lower production and beginning stocks. Although consumption remains stable, there are shifts in consumption patterns across different countries. The CAI maintains estimates for domestic consumption and production for the 2023-24 season, noting a decline in pink bollworm infestation in Indian cotton crops.

Demand for cotton remains healthy, with net sales for the 2023-24 season surging by 69 per cent compared to the previous week. This increase is driven by strong demand from China and Vietnam.

From a technical perspective, the market is experiencing mixed signals. There is increased selling pressure, but also strong support levels. Overall, the sentiment in the cotton candy market is cautious, influenced by both supply-side factors and technical dynamics.