Cotton yesterday settled up by 0.19% at 21160 on short covering after prices as pressure seen after Cotton Association of India increasing India cotton stock estimates. Cotton Association of India increased Indian cotton output estimates for 2020-21 season to 358.50 lakh bales (170 kg) against 356 lakh bales pegged previously. Cotton farmers of Anantapur, who suffered due to vagaries of nature earlier, are now suffering due to lack of procurement centres in the district. The district has two cotton procurement centres in Gooty and Tadipatri, while Rythu Bharosa Kendras (RBKs) are limited to registering the names of the cotton growers. The Cotton Corporation of India (CCI), which opened two procurement centres, is paying Rs 5,825 per quintal for high quality cotton and Rs 5,725 per quintal for medium quality and Rs 5,615 for the low grade cotton to the farmers. But the farmers cannot go directly to the CCI procurement centres and sell their produce. They have to get their names registered with the RBKs and only after getting an alert on their mobile phones, they can go to the procurement centres. The farmers have to wait for their serial number and the produce will be procured depending on availability of space in the warehouse of the CCI procurement centres. In spot market, Cotton dropped by -20 Rupees to end at 20890 Rupees. Technically market is under short covering as market has witnessed drop in open interest by -8.61% to settled at 2737 while prices up 40 rupees, now Cotton is getting support at 21060 and below same could see a test of 20950 levels, and resistance is now likely to be seen at 21240, a move above could see prices testing 21310.
Trading Idea for the day
Cotton trading range for the day is 20950-21310.
Cotton gained on short covering after prices as pressure seen after Cotton Association of India increasing India cotton stock estimates.
CAI increased Indian cotton output estimates for 2020-21 season to 358.50 lakh bales.
Cotton farmers of Anantapur, are suffering due to lack of procurement centres in the district.
Cocudakl yesterday settled up by 2.4% at 2050 on some low level buying after prices dropped as spinning mills have slowed down their purchases as they have 30-45 days cotton stocks with them. Enquiries for yarn have also slowed. The USDA stated in a latest monthly update that the largest changes in the global 2020/21 cotton outlook this month are lower production and ending stocks, led by changes in the United States. World production in 2020-21 is forecast more than 1.0 million bales lower compared to the previous month’s estimate at 112.87 million bales, with non-US reductions including Pakistan, Mali, and Argentina. Outside the United States, Pakistan’s 200,000-bale decline is the largest change, with smaller upward revisions for Greece, Australia, and Turkey. In 2019-20, the USDA had estimated a total global output of 122.14 million bales, meaning than current estimates are reflecting a drop of around 7.60%.Projected world consumption in 2020/21 is 100,000 bales higher this month, as a 500,000-bale increase for China and a 200,000-bale increase for Turkey are partly offset by reductions for Indonesia, Vietnam, the United States, and some smaller countries. Similarly, a 500,000-bale increase in China’s projected imports is partly offset by a 200,000-bale decline for Indonesia. World trade is projected 350,000 bales higher, with Australia and Mexico exports up by smaller amounts than the United States, and lower exports projected for Mali. In Akola spot market, Cocudakl dropped by -4.95 Rupees to end at 2042.2 Rupees per 100 kgs. Technically market is under fresh buying as market has witnessed gain in open interest by 2.27% to settled at 94970 while prices up 48 rupees, now Cocudakl is getting support at 2007 and below same could see a test of 1964 levels, and resistance is now likely to be seen at 2074, a move above could see prices testing 2098.
Trading Idea for the day
Cocudakl trading range for the day is 1964-2098
Cocudakl gained on some low level buying after prices dropped as spinning mills have slowed down their purchases
However downside seen limited as USDA stated that the largest changes in the global 2020/21 cotton outlook this month are lower production and ending stocks
World production in 2020-21 is forecast more than 1.0 million bales lower compared to the previous month’s estimate at 112.87 million bales
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