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COTTON

Cotton yesterday settled up by 0.67% at 31420 taking cues from a wider market rebound, as investors shrugged off worries over the Omicron coronavirus variant. Sentiment was also buoyed by the December World Agricultural Supply and Demand Estimates (WASDE) report, which forecast global ending stocks at 85.73 million bales for the 2021/22 crop year, about 1.2 million bales lower than the previous month, citing lower output and slightly higher consumption. But the report also slightly raised its U.S. production estimate to 18.28 million bales, while ending stocks estimates were unchanged at 3.40 million bales. Meanwhile, the United States Department of Agriculture in another report announced net sales of 382,600 running bales, rose 2% from the previous week and 83% from the prior 4-week average. Increases were primarily from China. Arrivals of cotton were at 177,500 bales, higher than 5,500 bales against 172,000 bales previous day. India's cotton exports in the ongoing 2021-22 (Oct-Sep) marketing year have slowed due to higher prices in the domestic market, making overseas sales economically unviable. In the ongoing marketing year, around 800,000 bales of cotton were exported till November, sharply lower than the previous year. In spot market, Cotton dropped by -70 Rupees to end at 31610 Rupees.Technically market is under short covering as market has witnessed drop in open interest by -2.18% to settled at 4075 while prices up 210 rupees, now Cotton is getting support at 31350 and below same could see a test of 31280 levels, and resistance is now likely to be seen at 31500, a move above could see prices testing 31580

Technical Chart

Trading Range

Cotton trading range for the day is 31280-31580.

Cotton gains taking cues from a wider market rebound, as investors shrugged off worries over the Omicron coronavirus variant.

WASDE forecast global ending stocks at 85.73 million bales for the 2021/22 crop year, about 1.2 million bales lower

The report also slightly raised its U.S. production estimate to 18.28 million bales

COCUDAKL

Cocudakl yesterday settled down by -0.4% at 2765 as the chances of re-emergence of the Covid through the Omicron variant is said to be having a global impact. However, downside seen limited amid tight supplies owing to higher input costs with rising global demand. The global cotton balance sheets for 2021/22 include higher production and consumption, and slightly lower ending stocks. The projected global consumption is up 700,000 bales. The world production forecast is 1.5 million bales higher as gains for Brazil, Australia, Pakistan, and the United States more than offset a 200,000- bale decline in Greece following unusually heavy October rainfall. World ending stocks are projected at 86.9 million bales, 200,000 bales lower than in October, and 2.4 million bales lower than in 2020/21. The broader-based view for cotton is therefore positive from a pricing perspective, which implies that cotton cake prices shall tend to remain in an upward trend in forthcoming weeks. Dairy prices rose at the global auction, surpassing their March peak to touch a fresh seven-year high, as tight milk supply underpins demand for New Zealand’s biggest export commodity. The Global Dairy Trade price index increased 1.4 per cent at the latest auction, to touch its highest level since March 2014. The index has been on a march higher since August. In Akola spot market, Cocudakl gained by 21.25 Rupees to end at 2821.25 Rupees per 100 kgs.Technically market is under fresh selling as market has witnessed gain in open interest by 9.31% to settled at 73600 while prices down -11 rupees, now Cocudakl is getting support at 2746 and below same could see a test of 2726 levels, and resistance is now likely to be seen at 2798, a move above could see prices testing 2830.

Technical Chart

Trading Range

Cocudakl trading range for the day is 2726-2830.

Cocudakl prices dropped as the chances of re-emergence of the Covid through the Omicron variant is said to be having a global impact.

Projected 2021/22 world cotton ending stocks are 1.2 million bales lower, due to lower beginning stocks, lower production, and slightly higher consumption.

The U.S. cotton 2021/22 supply and demand forecasts are largely unchanged this month, with only a slight increase in production.

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