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Cotton on MCX settled down by -0.37% at 19050 as the farmers are bringing dried cotton to the procurements centers as recommended by CCI. Their produce attracting the minimum support price (MSP) of Rs 5,500 per quintal. The trend of bringing dried up produce to the yards is catching up rapidly. The Cotton Corporation of India (CCI) bought nearly 2 lakh bales until November 25 even as late arrivals and high moisture content restricted its buying program, said sources. Arrivals began picking up and prices are ruling around government fixed minimum support price (MSP) in most producing centres. The state owned agency purchased highest quantity of 1.20 lakh bales in Telangana followed by 22,000 bales in the markets of Punjab and 19,000 bales in Rajasthan, sources said. Total arrivals stood around 29.28 lakh bales so far. And a total of 8.48 lakh bales have arrived, higher against 6.15 lakh bales last week. Of this, 4.49 lakh bales were from Central India, followed by 2.13 lakh bales from South India in this week. The arrivals from North India have started so the arrivals increased to around 1.85 lakh bales this week. Last year, the government agency purchased total 10.70 lakh bales of cotton and out of this 1.70 lakh bales sold in the market so far. Technically market is under fresh selling as market has witnessed gain in open interest by 3.26% to settled at 2120 while prices down -70 rupees, now Cotton is getting support at 18990 and below same could see a test of 18940 levels, and resistance is now likely to be seen at 19120, a move above could see prices testing 19200.
Trading Idea for the day
* Cotton trading range for the day is 18970-19230.
* Cotton prices gained on short covering after prices dropped due to improved sowing, higher imports and weak international prices.
* However, the crop is higher than 2018-19 when pest attack in Maharashtra and Telangana and erratic rains in Gujarat hit yield.
* USDA hiked India's 2019-20 cotton import numbers to 18 lakh bales from last month's estimates of 16 lakh bales.
Cocudakl on NCDEX settled up 2% at 1989 amid last year’s shortage of cotton seed still has spillover effect during early phase of new season. Excessive rains have delayed crop as well as it has done heavy crop damage in parts of Maharashtra and Gujarat. Cotton production during Kharif 2019-20 is estimated at 322.67 Lakh bales of 170 kg each. The production is higher by 12.40% than the production of 287.08 Lakh bales of 170 kg each. The Cotton Association of India has sought export incentives as a bumper crop this year is likely to pull down spot prices below the minimum support price and may push the government to procure the fibre at price higher than the market price. USDA has raised its estimate for India's cotton production during 2019-20 to 376 Lakh 170 bales each. from 372 Lakh bales projected in the previous month. The 2019/20 global cotton supply and demand forecasts released by USDA show little overall change from last month. World production is 130,000 bales lower as declines for Brazil, Pakistan, Australia, and the United States more than offset a 1-million-bale increase in India. Global consumption is 130,000 bales lower than September’s forecast and the projection for world trade in 2019/20 is reduced 300,000 bales. In Akola spot market, Cocudakl gained by 0.05 Rupees to end at 1987.85 Rupees per 100 kgs. Technically market is under fresh buying as market has witnessed gain in open interest by 1.68% to settled at 53990 while prices up 39 rupees, now Cocudakl is getting support at 1954 and below same could see a test of 1918 level, and resistance is now likely to be seen at 2010, a move above could see prices testing 2030.
Trading Idea for the day
* Cocudakl trading range for the day is 1918-2030.
* Cocudakl prices gained amid last year’s shortage of cotton seed still has spillover effect during early phase of new season.
* Excessive rains have delayed crop as well as it has done heavy crop damage in parts of Maharashtra and Gujarat.
* Cotton production during Kharif 2019-20 is estimated at 322.67 Lakh bales of 170 kg each.
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