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Published on 5/08/2020 10:52:31 AM | Source: Kedia Advisory

Cocudakl trading range for the day is 1706-1838 - Kedia Advisory

Posted in Commodities Reports| #Commodity Tips #Kedia Advisory

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Cotton

Cotton yesterday settled up by 0.25% at 16300 on short covering after prices dropped due to weak demand and increased sowing this season. Industry and trade associations allege that “excessively high” estimates made by the United States Agriculture Department (USDA) have increased pressure on cotton prices. "USDA, in its report, has shown carryover stock of 19 million US size bales as on July 31, 2020. If we reduce two months’ consumption by Indian mills for August and September 2020 from the said USDA stock, the carryover stock of Indian cotton works out to about 200 lakh bales as on September 30, 2020, as against 50 lakh bales estimated by the Cotton Corporation of India (CCI)," the Cotton Association of India (CAI) said in a recent release. “Cotton Advisory Board has also estimated carryover stock of Indian cotton as on September 30, 2020 at 48.41 lakh bales.” Industry body Southern India Mills Association (SIMA) too has objected to the USDA’s higher estimates. However, it has said that the difference between the closing-stock estimate of Indian industry and that of the USDA is of about 90 lakh bales to 100 lakh bales, as on September 30. Technically market is under short covering as market has witnessed drop in open interest by -5.14% to settled at 2382 while prices up 40 rupees, now Cotton is getting support at 16250 and below same could see a test of 16210 levels, and resistance is now likely to be seen at 16330, a move above could see prices testing 16370.

Trading Idea for the day

* Cotton trading range for the day is 16210-16370

* Cotton gained on short covering after prices dropped due to weak demand and increased sowing this season.

* Industry and trade associations allege that “excessively high” estimates made by the USDA have increased pressure on cotton prices.

* USDA, in its report, has shown carryover stock of 19 million US size bales as on July 31, 2020

 

Cocudakl

Cocudakl yesterday settled down by -2.61% at 1755 as Cotton sowing has spiked in Maharashtra to 23.772 lha this year from last year’s 0.194 lha, while in Gujarat, the figures are 11.67 lha this year and 5 lha last year. A record 218.73 lakh quintal cotton has been procured in Maharashtra despite the COVID-19 pandemic and onset of monsoon, the state cabinet was informed. This was the highest government procurement of cotton in the last ten years, said a statement from the Chief Minister's Office (CMO). The purchased cotton was worth Rs 11,776.89 crore, out of which farmers have been paid Rs 11,029.47 crore so far, it said. The CCI and the State Cotton Federation had procured 91.90 lakh quintal and 54.03 lakh quintal cotton, respectively, before the coronavirus outbreak, it said. During the pandemic, farmers preferred selling cotton at government procurement centres since market rates were lower than the minimum support price (MSP) of the government, said the CMO statement. The Cotton Corporation of India (CCI), which is holding surplus stocks of cotton just ahead of the next harvest season, is trying to boost exports of the fibre crop. A memorandum of understanding is being worked out to export 1.5-2 million bales (of 170 kilograms each) of cotton to Bangladesh while the state-run CCI will also set up its own warehouse in Vietnam to boost cotton exports. Technically market is under long liquidation as market has witnessed drop in open interest by -8.48% to settled at 20390 while prices down -47 rupees, now Cocudakl is getting support at 1730 and below same could see a test of 1706 levels, and resistance is now likely to be seen at 1796, a move above could see prices testing 1838.

Trading Idea for the day

* Cocudakl trading range for the day is 1706-1838.

* Cocudakl prices dropped as Cotton sowing has spiked in Maharashtra to 23.772 lha this year

* A record 218.73 lakh quintal cotton has been procured in Maharashtra despite the COVID-19 pandemic and onset of monsoon

* CCI which is holding surplus stocks of cotton just ahead of the next harvest season, is trying to boost exports of the fibre crop.

 

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