Cotton yesterday settled up by 2.58% at 19850 as support seen as the relentless monsoon rains, which have ravaged large parts of Vidarbha and Marathwada region of Maharashtra, has now started affecting the cotton crop. Local farmers and leaders of Shetkari Sangthana want early procurement of cotton by Cotton Corporation of India (CCI) and Maharashtra State Co-operative Cotton Growers’ Marketing Federation Ltd (Mahacot) as exposure to excess of rains and lack of labour force for plucking cotton is affecting the crop. They have also demanded that procurement norm of moisture content in cotton should be increased so that farmers could sell more cotton to the CCI and Mahacot. They are also facing massive labour problems in plucking cotton crop. Out of the total cotton production of Maharashtra, almost 15 per cent is from that district. Last year almost 55 lakh quintal (100kg) cotton was procured under MSP prices from the district. However, the moisture content is capped at 12 per cent by CCI and Mahacot. This cap should be increased to 18 per cent given the present circumstances. Framers are willing for lesser remuneration but at MSP rates. In the open market the farmers will get much less money for their cotton. Technically market is under fresh buying as market has witnessed gain in open interest by 5.56% to settled at 760 while prices up 50 rupees, now Cotton is getting support at 17950 and below same could see a test of 17880 levels, and resistance is now likely to be seen at 18080, a move above could see prices testing 18140.
Trading Idea for the day
Cotton trading range for the day is 19490-20110
Cotton gains as support seen as relentless monsoon rains hit cotton crop in Maharashtra
Farmers want early procurement of cotton as exposure to excess of rains and lack of labour force for plucking cotton is affecting the crop.
However, the moisture content is capped at 12 per cent by CCI and Mahacot
Cocudakl yesterday settled down by -1.7% at 1790 on profit booking after prices gains as support seen the heavy rainfall since last two days in Telangana, crop damage is expected in some regions in Warangal and Adilabad region. And the main cotton growing regions; Guntur, Krishna and Parakasam districts in Andhra Pardesh likely to have affected with heavy rainfall and expects a damage in the quality of cotton and resulting in the yield loss. As this year, the farmers were expecting higher yield as there were no pink bollworm infestation. However, after 17th October, rains will be reducing and clear weather is expected in Southern regions of India with scattered rains only. According to Cotton Association of India (CAI), the cotton production in 2019-20 is expected to have reached 360 lakh bales up from 354.5 lakh bales as estimated earlier and declined imports by 50,000 bales to 15.5 lakh bales from the previous estimates. According to sources, the CAB estimates that during the current cotton season, there will be 360 million bales of white gold production. Whereas last year the production was 3.57 crore bales. This time around 4 to 4.25 crore bales of production are being speculated by private traders in the country. Technically market is under fresh selling as market has witnessed gain in open interest by 0.12% to settled at 16670 while prices down -37 rupees, now Cocudakl is getting support at 1853 and below same could see a test of 1834 levels, and resistance is now likely to be seen at 1901, a move above could see prices testing 1930.
Trading Idea for the day
Cocudakl trading range for the day is 1737-1867
Cocudakl dropped on profit booking after prices gains after heavy rainfall in South India likely to affect cotton yield
However this year, the farmers were expecting higher yield as there were no pink bollworm infestation.
After 17th October, rains will be reducing and clear weather is expected in Southern regions of India with scattered rains only.
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