Cotton yesterday settled down by -0.41% at 36840 as India’s Cotton sowing gained by nearly 7.34% to 126.66 lakh hectares in 2022 against an area sown of 118 lakh hectares in 2021. Cotton crops, remain under threat due to adverse weather conditions and pest attacks in major growing regions. India’s cotton output for the season 2022-23 is likely to touch 375 lakh bales (each of 170 kg), given no climatic adversities affect the crop during October, sources said. India’s Cotton sowing gained by nearly 7.34% to 126.66 lakh hectares in 2022 against an area sown of 118 lakh hectares in 2021.Atul Ganatra, President, Cotton Association of India (CAI), stated that the cotton crop condition in India was "very good and if everything goes well, we are expecting 350 lakh bales +/– 25 lakh bales." The crop size may touch 375 lakh bales if there are no rains during October. In its monthly supply-demand report, the United States Department of Agriculture (USDA) cut its global production forecast by 3.1 million bales, and the U.S. output outlook by 3 million bales for the 2022-23 crop year. Hot and dry weather conditions in key growing areas in the United States have threatened the condition of the natural fiber crop and raised supply concerns. In recent time, the heavy rainfalls and pest attacks are affecting the cotton crop. In the northern states of Punjab, Haryana, and Rajasthan cotton crop has been affected due to pink bollworm infestation. In spot market, Cotton dropped by - 150 Rupees to end at 42890 Rupees.Technically market is under short covering as the market has witnessed a drop in open interest by -4.91% to settle at 601 while prices are up 540 rupees, now Cotton is getting support at 36480 and below same could see a test of 35970 levels, and resistance is now likely to be seen at 37300, a move above could see prices testing 37610.
Trading Idea for the day
Cotton trading range for the day is 36470-37490.
Cotton dropped as as India’s Cotton sowing gained by nearly 7.34% to126.66 lakh hectares in 2022
India’s cotton output for the season 2022-23 is likely to touch 375 lakhbales
Cotton area is estimated at 126 lakh hectares till September 2 — up 8-9per cent from 117 lakh hectares last year.
Cocudakl yesterday settled down by -0.09% at 2342 due to surging selling pressure at physical market. Stockiest are offloading their stocks in wake of bumper production outlook of cotton. Reports of rising area under cotton and increased availability of green fodder kept cotton seed oil cake prices down. However some support seen last week as available stock is estimated to be very limited, the quality of which is also very weak. Support also seen after reports that there is a forecast of damage due to heavy rains after sowing of cotton in Vidarbha and Khandesh parts of Maharashtra. Sporadic arrivals of new cotton have already started in Haryana and Punjab, while the arrival of new cotton will start in Khandesh at the end of August and in Madhya Pradesh in September. All India Mandi arrivals of Kapas fell by around 82% on M-o-M basis; they were also lower by around 19% on Y-o-Y basis. Gujarat is a major producer of cotton across the country and reports of increase in sowing of cotton by at least 20% in Gujarat are coming. As per CAI, total cotton supply till end of the cotton season 2021-22 is estimated at 402.16 lakh bales of 170 kg each, lower by around 18% as compared to 488 lakh bales last year. Cocudakl’s stock in NCDEX warehouse reduced from 21 lakh sacks to 7.50 lakh sacks. 60 to 70% of Cocudakl’s stock in Gujarat is estimated to be weak quality stock. In Akola spot market, Cocudakl gained by 20.1 Rupees to end at 2685.85 Rupees per 100 kgs.Technically market is under fresh selling as the market has witnessed a gain in open interest by 6.38% to settle at 22850 while prices are down -7 rupees, now Cocudakl is getting support at 2331 and below same could see a test of 2319 levels, and resistance is now likely to be seen at 2362, a move above could see prices testing 2381.
Trading Idea for the day
Cocudakl trading range for the day is 2320-2366.
Cocudakl prices seen pressured due to surging selling pressure atphysical market
Stockiest are offloading their stocks in wake of bumper productionoutlook of cotton.
Weakness in relative feed meal like soymeal and mustard meal will pullthe prices down further.
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