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Cotton

Fundamentals

Cotton yesterday settled down by -0.05% at 22180 as the market is getting cotton supplies from the Cotton Corporation of India. This year the production of cotton is being reported in the country at 360 million bales and till now 270-275 lakh bales are being said to come in, while the arrival is not more than 225 lakh bales. There will be a shortage of raw material cottonseed in the coming time, which does not seem to be a major fall in the prices of cotton seed oil cake. CAI has kept its consumption estimate for the current crop year at 330.00 lakh bale in the previous month. India’s cotton exports to get a boost with global cotton consumption seen going up. In its latest cotton demand and supply estimates for March, the International Cotton Advisory Committee (ICAC) has revised upwards the global consumption projections at 24.5 million tonnes (mt) for 2020-21 against 22.8 mt in the previous year. However, the rise in the global consumption will boost prospects for Indian cotton exports. Cotton Association of India (CAI) had projected India’s cotton exports at 54 lakh bales (each of 170 kg) for the season 2020-21 against 50 lakh bales in the previous year. This, according to trade sources, is likely to further go up by the end of the season in September 2021. In spot market, Cotton dropped by -120 Rupees to end at 22040 Rupees. Technically market is under long liquidation as market has witnessed drop in open interest by -2.71% to settled at 8513 while prices down -10 rupees, now Cotton is getting support at 22060 and below same could see a test of 21930 levels, and resistance is now likely to be seen at 22260, a move above could see prices testing 22330.

Trading Idea for the day

* Cotton trading range for the day is 21930-22330.

* Cotton settled flat as the market is getting cotton supplies from the Cotton Corporation of India

* India’s cotton exports to get a boost with global cotton consumption seen going up

* ICAC has revised upwards the global consumption projections at 24.5 million tonnes (mt) for 2020-21 against 22.8 mt in the previous year.

Cocudakl

Fundamentals

Cocudakl yesterday settled down by -1.62% at 2240 tracking weakness in cotton prices after seen supported as stock levels are forecast to be down 1% on last year. Global cotton stock levels are expected to drop to 21.1m tonnes by the end of 2020/21 as consumption is set to outpace production. The cotton consumption forecast has been revised upward this month from 24.2m tonnes to 24.5m tonnes, and while the projected 7% year-over-year increase is not nearly enough to offset the losses caused by the Covid-19 pandemic, it is expected to outpace production, thus drawing stocks down by the end of the season. According to the latest update from the International Cotton Advisory Committee (ICAC), stock levels are forecast to be down 1% on last year. Meanwhile, the Secretariat is projecting an increase in global trade. Both China and Pakistan are forecast to increase imports, the former benefitting from the price gap between domestic and foreign cotton and the latter due to a decrease in domestic production. The ICAC is an association of cotton producing, consuming and trading countries. It helps member countries maintain a healthy world cotton economy, provides transparency to the world cotton market by serving as a clearinghouse for technical information on cotton production, and serves as a forum for discussing cotton issues of international significance. In Akola spot market, Cocudakl dropped by -4.95 Rupees to end at 2374.15 Rupees per 100 kgs. Technically market is under long liquidation as market has witnessed drop in open interest by -4.52% to settled at 79970 while prices down -37 rupees, now Cocudakl is getting support at 2219 and below same could see a test of 2199 levels, and resistance is now likely to be seen at 2269, a move above could see prices testing 2299.

Trading Idea for the day

* Cocudakl trading range for the day is 2199-2299

* Cocudakl prices dropped tracking weakness in cotton prices after seen supported as stock levels are forecast to be down 1% on last year.

* The cotton consumption forecast has been revised upward this month from 24.2m tonnes to 24.5m tonnes.

* Global cotton stock levels are expected to drop to 21.1m tonnes by the end of 2020/21 as consumption is set to outpace production.

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