Cotton candy settled down by -0.23% at 61800, influenced by the Southern India Mills’ Association's (SIMA) recommendation to textile mills to avoid panic buying amid rising cotton prices, with a global supply increase anticipated post-July. The U.S. Department of Agriculture (USDA) reported a 69% decline in net sales for 2023/2024 from the previous week and an 83% drop from the prior 4-week average.

The February WASDE report from the USDA indicated a 355,000 bales lower projection for world cotton production in 2023/24, with reductions in Australia and Benin offsetting smaller increases elsewhere. World cotton ending stocks for 2023/24 are nearly 700,000 bales lower than January, reflecting lower beginning stocks and production, while world consumption is expected to remain virtually unchanged.

Indian cotton exports in February are set to reach the highest level in two years, driven by a rally in global prices, making Indian cotton attractive to Asian buyers. Contracts for 400,000 bales were signed, primarily with China, Bangladesh, and Vietnam. India could export 2 million bales in the 2023/24 marketing year, surpassing earlier expectations. The Cotton Association of India predicts a 7.7% decline in India's cotton production to 29.41 million bales in 2023/24, the lowest since 2007/08. The CAI retains its pressing estimate at 294.10 lakh bales, with the total cotton supply till January estimated at 210.05 lakh bales.

Technically, the market is under long liquidation, witnessing a drop in open interest by -11.3% to settle at 416. Prices decreased by -140 rupees. Support for Cotton candy is identified at 61460, with a potential test of 61130 levels on the downside. Resistance is expected at 62360, and a move above could lead to further testing of 62930.