01-01-1970 12:00 AM | Source: Kedia Advisory
This should have been higher at 55,000 to 60,000 bales - Kedia Advisory
News By Tags | #473 #5839

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COTTON

Cotton yesterday settled up by 0.57% at 31820 as arrivals of new crop to mandis is currently slow and domestic mills are making limited purchases given the high price of the natural fibre. The discovery of a new coronavirus variant dampened market sentiment and stoked concerns over demand for the natural fiber. Meanwhile, the U.S. Department of Agriculture's weekly export sales report showed net sales of 196,900 running bales, up 44% from the previous week and 3% from the prior four-week average, with China being the top buyer. According to traders, arrivals of new crop to Ahmedabad mandis is currently slow and domestic mills are making limited purchases given the high price of the natural fibre. About 35,000 to 40,000 bales (one bale weighs 170kg) are arriving daily in local mandis. This should have been higher at 55,000 to 60,000 bales. However downside seen limited in anticipation of a possible fall in production, and the remaining cotton stock is also low, while import demand from China remains high. Both production estimates for the 2021/22 crop year and ending stocks in the U.S. were largely unchanged at 18.20 million bales and 3.40 million bales respectively, the USDA said in its November World Agricultural Supply and Demand Estimates (WASDE) report. In spot market, Cotton dropped by -290 Rupees to end at 31620 Rupees.Technically market is under fresh buying as market has witnessed gain in open interest by 6.62% to settled at 4910 while prices up 180 rupees, now Cotton is getting support at 31410 and below same could see a test of 31010 levels, and resistance is now likely to be seen at 32100, a move above could see prices testing 32390.

 

Technical Chart

 

Trading Range

Cotton trading range for the day is 31010-32390.

Cotton prices gained as arrivals of new crop to mandis is currently slow

However the discovery of a new coronavirus variant dampened market sentiment and stoked concerns over demand.

Global authorities reacted with alarm to the new coronavirus variant, with the EU, India and Britain tightening border controls.

 

COCUDAKL

Cocudakl yesterday settled down by -0.37% at 2722 However downside seen limited amid tight supplies owing to higher input costs with rising global demand. Cotton consumption is consistently on the rise due to increasing demand and mitigating impact of COVID-19 in India, Pakistan, Mexico and Bangladesh. Meanwhile the USDA in its latest monthly report estimated global production to go up due to better crop yields in Brazil, Australia and Pakistan. Elsewhere, it is reported that the US is looking to expand cotton exports to Bangladesh, the world’s second largest importer of cotton whereas in Pakistan, cotton arrivals to ginneries reached over 6.8 million bales, up 70% from a year earlier. The Cotton Association of India (CAI) estimated cotton output at 360.13 lakh bales for the crop year (October-September) 2021-22, due to expectation of better yield. The total cotton production in the last season is estimated at 353 lakh bales, which is 7.13 lakh bales less than the current season, the CAI said in a statement. “The cotton yield is estimated to be excellent and the farmers are expected to go for the third and fourth pickings due to good availability of water following a good monsoon,” CAI president Atul Ganatra told PTI. In Akola spot market, Cocudakl dropped by -34.8 Rupees to end at 2721.75 Rupees per 100 kgs.Technically market is under long liquidation as market has witnessed drop in open interest by -4.75% to settled at while prices down -10 rupees, now Cocudakl is getting support at 2670 and below same could see a test of 2617 levels, and resistance is now likely to be seen at 2758, a move above could see prices testing 2793.

 

Technical Chart

 

Trading Range

Cocudakl trading range for the day is 2617-2793.

Cocudakl prices dropped on concerns of new variant of coronavirus, Omicron.

However downside seen limited amid tight supplies owing to higher input costs with rising global demand.

Cotton consumption is consistently on the rise due to increasing demand and mitigating impact of COVID-19 in India

 

 

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