📉 COTTON // one trigger away from landing
Nice space for the shorts below the trigger level
Key Chart (H4)
The market is bearish on the major timeframes, and the waves turned south after the rejection on the daily impulse base.
The clean H4 breakout is the trigger that if broken significantly, the H4 and the weekly target fibo levels act as targets, along with a weekly breakout in line with the weekly target fibo 138.2.
Key Fundamentals
Summary
The global cotton market is facing mixed signals as production challenges in key regions counterbalance advancements in technology and sustainability. Analysts project moderate growth, with price fluctuations influenced by supply constraints and demand recovery.
Key Factors
• Production Trends:
• In India, cotton production is expected to fall by 7.4% in 2024/25 due to reduced planted area and excessive rainfall, potentially reducing exports (Reuters).
• The U.S., however, has increased cotton acreage to 11.67 million acres for 2024, signaling potential supply growth (MarketWatch).
• Technological Advancements: The adoption of genetically modified cotton varieties and precision agriculture is enhancing efficiency in production (Wikipedia).
• Sustainability Initiatives: Efforts like Italy’s “Grown in Italy” movement aim to reduce carbon footprints, while Indian farmers are transitioning to organic practices for better profitability (Vogue Business, Le Monde).
Actionable Insights
• Bullish Case: Sustained demand for organic and sustainable cotton, coupled with advancements in farming technology, could support higher prices in the long term.
• Bearish Case: Increased U.S. production and reduced demand from key export markets may limit price upside.