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Cotton

Cotton yesterday settled up by 1.09% at 16670 tracking overseas prices on the back of firmer oil prices and a slight uptick in export data by the U.S. Department of Agriculture (USDA). Weekly export sales report from the USDA showed net sales of upland cotton totaled 147,500 running bales for 2019/2020 in the week ended March 26, down 47% from the previous week, while exports of 400,800 RB were up 4% from the previous week. The Centre will spend ₹1,061 crore to reimburse the Cotton Corporation of India (CCI) and its sub-agent in Maharashtra for procuring cotton at the minimum support price in that State since 2014. The agriculture department has started creating awareness among the farmers about pink bollworm attack on cotton crops. According to a spokesman of agriculture department, pink bollworm goes in winter nap during November and December and its eggs remain present on cotton seeds, branches and dried leafs in farms and ginning factories. The Cotton Corporation of India (CCI) has stated that cotton procurement at MSP will continue across markets. However, farmers are still holding onto their crops seeking better prices and also due to the directives issued by the district collectors to avoid crowds. Meanwhile, the United States Department of Agriculture reported net sales of 214,600 running bales (RB) for 2019/2020, which included 39,600 RB sales to China. Technically market is under short covering as market has witnessed drop in open interest by -1.43% to settled at 5777 while prices up 180 rupees, now Cotton is getting support at 16500 and below same could see a test of 16340 levels, and resistance is now likely to be seen at 16770, a move above could see prices testing 16880.

Trading Idea for the day

* Cotton trading range for the day is 16340-16880.

* Cotton gained tracking overseas prices on the back of firmer oil prices and a slight uptick in export data by the U.S. Department of Agriculture (USDA).

* The agriculture department has started creating awareness among the farmers about pink bollworm attack on cotton crops.

* Weekly export sales report from the USDA showed net sales of upland cotton totaled 147,500 running bales for 2019/2020

Cocudakl

Cocudakl yesterday settled up by 1.84% at 1997 as support seen due to supply shortages as many cotton seed crushing units are closed after the Prime Minister in his speech on 24th March 2020, announced a lock down across India. Cocudakl prices gained almost 40% in last 1 months period as disrupted supply chains, as well as factory shutdowns, are leading to low inventory among vendors. In several States like MP, Maharashtra and Delhi, mandi operations have also come to a halt. The supply has been badly hit which will adversely impact the farmers as there will be no buyers and vice a versa end user are are under short supply. The cotton trade was badly affected by coronavirus internationally. Local textile mills and ginners were in distress. Textile mills were shut down after the building up of inventory as a result of suspension of export orders from abroad. There was no business in the local cotton market due to coronavirus. On the other hand big international importers especially the big American and European importers of textile had hinted of canceling the orders and stopping of shipments due to which textile mills were in distress. Many mills were closed up till now due to the building up of inventory while some mills were working partially but they were near closing. Due to the closure of mills unemployment was increasing. Technically market is under short covering as market has witnessed drop in open interest by -11.32% to settled at 28670 while prices up 36 rupees, now Cocudakl is getting support at 1965 and below same could see a test of 1932 levels, and resistance is now likely to be seen at 2022, a move above could see prices testing 2046.

Trading Idea for the day

* Cocudakl trading range for the day is 1932-2046.

* Cocudakl gained as support seen due to supply shortages as many cotton seed crushing units are closed.

* The cotton trade was badly affected by coronavirus internationally. Local textile mills and ginners were in distress.

* Many mills were closed up till now due to the building up of inventory while some mills were working partially but they were near closing.

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