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Cotton on MCX settled up 0.16% at 19110, gained on fresh buying while upside will be limited as lingering fears over the coronavirus impact on global demand. New season cotton crop arrival has picked pace amid estimates of better production this year as compared to last year. Concerns over decline in demand from China amid the outbreak of Coronavirus there and huge stock with the government agency has pressurized Cotton prices in the domestic market and spillover effect of the same might have undermined the prices of COCUD as well. Cotton Corporation of India has purchased Around 40 lakh bales of Cotton as on Jan 16, 2020 during ongoing procurement season. (Source: Cogencis) The Maharashtra State Cooperative Cotton Growers Marketing Federation Ltd is looking to procure nearly 10 lakh bales (1 bale – 170 kg) of cotton in the current year that started Oct 1, as prices are likely to be near the minimum support price for a prolonged period due to expectation of bumper crop coupled with slowdown in the textile sector. " So far we have bought around 360,000 bales at the minimum support price," said a senior official of the state-owned federation, Technically market is under fresh buying as market has witnessed gain in open interest by 1.88% to settled at 7686 while prices up 30 rupees, now Cotton is getting support at 19053.4 and below same could see a test of 18996.7 level, and resistance is now likely to be seen at 19223.4, a move above could see prices testing 19336.7.
Trading Idea for the day
* Cotton trading range for the day is 19000-19340.
* Cotton on MCX settled up 0.16% at 19110 gained on fresh buying while upside will be limited.
* Lingering fears over the coronavirus impact on global demand.
* New season cotton crop arrival has picked pace amid estimates of better production this year
Cocudakl on NCDEX settled down -0.93% at 1595, on fresh selling while prices in sever oversold zone below 1600 level mark as fresh arrival in the market while prices are expected to hold key support of 1600 level in today’s session. Generally, cotton cake is purchased for cattle feed. As a large quantity of groundnut cake is available this year, following bumper groundnut crop in the state, those who are in animal husbandry are preferring groundnut cake over cotton cake.” Last year, there were complaints regarding adulteration in cotton cake and hence people started buying groundnut cake despite availability of cotton cake in the market, opines Sejpal. Due to extended rains in the state, the new arrival of cotton bears as high as 20% of moisture, he said, adding that hence the cotton seed crushing units are required to dry the crop ahead of the crushing process. “In the beginning of the season, prices of cotton seed soared unnaturally due to speculative activities in the commodity. Moreover, groundnut cake and other fodder for cattle will be consumed and again cotton cake would be in demand. Technically market is under fresh selling as market has witnessed gain in open interest by 3.46% to settled at 91910 while prices down -15 rupees, now Cocudakl is getting support at 1575 and below same could see a test of 1554 level, and resistance is now likely to be seen at 1629, a move above could see prices testing 1662.
Trading Idea for the day
* Cocudakl trading range for the day is 1554-1662.
* Cocudakl on NCDEX settled down below 1600 level tracking weakness from other agri complex
* Prices are expected to hold key support of 1600 level in today’s session.
* Large quantity of groundnut cake is available this year, following bumper groundnut crop
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