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Published on 1/04/2020 10:34:40 AM | Source: Kedia Advisory

Cotton trading range for the day is 15960-16440 - Kedia Advisory

Posted in Commodities Reports| #Kedia Commodity Ltd #Commodity Tips

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Cotton

Cotton yesterday settled up by 0.87% at 16200 on short covering after prices dropped as slowing business activities across the globe due to the coronavirus pandemic heightened fears of sluggish demand for the natural fiber. 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. The International Cotton Advisory Committee expects global prices of cotton to rise due to lower ending stock in 2019-20 (Aug-Jul), the committee said in its report. The agency forecast global cotton ending stocks to decline to 18.0 mln tn from 18.27 mln tn estimated the previous month. Technically market is under short covering as market has witnessed drop in open interest by -0.47% to settled at 5946 while prices up 140 rupees, now Cotton is getting support at 16080 and below same could see a test of 15960 levels, and resistance is now likely to be seen at 16320, a move above could see prices testing 16440.

Trading Idea

* Cotton trading range for the day is 15960-16440.

* Cotton gained on short covering after prices dropped as slowing business activities across the globe due to the coronavirus pandemic heightened fears of sluggish demand.

* The Centre will spend ₹1,061 crore to reimburse the CCI and its subagent in Maharashtra for procuring cotton at the minimum support price in that State since 2014.

* The International Cotton Advisory Committee expects global prices of cotton to rise due to lower ending stock in 2019-20 (Aug-Jul).

Technical Chart

 

Cocudakl

Cocudakl yesterday settled down by -1.57% at 2066 on profit booking after prices gained as support seen after update that due to heavy moisture, nearly 60% cotton seed crushing units are closed. Of 1,000 cotton seed crushing units, nearly 400 mills are currently functional in the state as it is unviable to crush cotton seed in absence of cotton cake demand. Due to extended rains in the state, new arrival of cotton bear as high as 20% of moisture, he said, adding that hence the cotton seed crushing units are required to dry the crop ahead of crushing process The government has decided to exempt cottonseed oil cake from 5 percent General Sales Tax (GST) after taking International Monetary Fund (IMF) on board. The cotton industry is concerned that the huge cotton seed stock available with the state-run Cotton Corporation of India (CCI) may result in an increase of cotton oil as well as animal feed prices. For the 2019-20 season beginning October, the agency has procured 3.1 million tonnes of cotton bales of 170 kg each till date and aims to procure 10 million tonnes of the commodity this season. From the cotton procured by the CCI, the agency has extracted more than 200,000 tonnes of cotton seed. Technically market is under long liquidation as market has witnessed drop in open interest by -2.17% to settled at 42330 while prices down -33 rupees, now Cocudakl is getting support at 2030 and below same could see a test of 1995 levels, and resistance is now likely to be seen at 2114, a move above could see prices testing 2163.

Trading Idea

* Cocudakl trading range for the day is 1995-2163.

* Cocudakl dropped on profit booking after prices gained as support seen after update that due to heavy moisture.

* The government has decided to exempt cottonseed oil cake from 5 percent General Sales Tax.

* The cotton industry is concerned that the huge cotton seed stock available with the state-run Cotton Corporation of India.

 

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