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Cotton

Cotton yesterday settled up by 0.23% at 21450 as prices settled flat after the Union Ministry of Textiles’ Committee on Cotton Production and Consumption (COCPC) has projected a higher crop at 371 lakh bales (each of 170 kg) for the year 2020-21. Cotton trade had estimated the crop size at 358.50 lakh bales. In its meeting, the Committee, estimated the average cotton yield of 486.76 kg per hectare, up from 463.99 kg reported in the previous year. For the previous year, projected cotton crop size of 365 lakh bales in the country. As per the latest projections, Gujarat will be the largest cotton-growing State with 90.5 lakh bales and one of the highest yields at 676.86 kg per hectare. Rajasthan, with 27 lakh bales, is expected to have highest cotton yield at 683.04 kg. Besides Gujarat, the top three cotton growing states include Maharashtra with 86 lakh bales with 349.43 kg yield and Telangana with 60 lakh bales and 429.84 kg of cotton yield. Commenting on the cotton crop projections, J Thulasidharan, Chairman of Indian Cotton Federation, said that a higher crop would pose a serious challenge for India to clear huge stocks of the fibre crop. As per the government estimate, closing stock for 2020-21 is likely to be 97.95 lakh bales, as comapred to 120.95 lakh bales recorded last year. In spot market, Cotton dropped by -20 Rupees to end at 21280 Rupees. Technically market is under short covering as market has witnessed drop in open interest by -1.31% to settled at 5744 while prices up 50 rupees, now Cotton is getting support at 21360 and below same could see a test of 21280 levels, and resistance is now likely to be seen at 21510, a move above could see prices testing 21580.

Trading Idea for the day

Cotton trading range for the day is 21280-21580.

Cotton prices traded in range after COCPC estimate is higher by 12.5 lakh bales over trade projections

The Committee, estimated the average cotton yield of 486.76 kg per hectare, up from 463.99 kg reported in the previous year.

For the previous year, projected cotton crop size of 365 lakh bales in the country.

Cocudakl

Cocudakl yesterday settled up by 0.48% at 2297 as CCI hiked base price for 2020- 21 crop by Rs 500 per candy of 356 kg. Traders CCI bought over 90 lakh bales of cotton so far this season. Just four months after Cotton Corporation of India (CCI) started procurement in all its 400 centres across the country, the operations have stopped in over 300 centres as kapas (raw unginned seed cotton) prices in most mandis in major cotton producing states have crossed the government-declared minimum support price (MSP) of Rs 5,825 per quintal. The government-owned corporation had to wade in at the beginning of the cotton marketing season (October to September) 2020-21 to begin procurement. PK Agarwal, chairmancum-managing director of CCI, said, to date, they had affected procurement of 87.96 lakh bales of cotton from 18.02 lakh farmers. India, the world’s biggest cotton grower, imposed a 10% duty on imports of the fiber to help farmers, Finance Minister Nirmala Sitharaman said. The tax comprises a basic customs duty of 5% and an additional 5% levy to finance the development of agricultural infrastructure in the country, according to the budget documents. India’s cotton output may climb to 37.12 million bales of 170 kilograms each in 2020-21, from 35.49 million bales a year earlier, according to the farm ministry. In Akola spot market, Cocudakl dropped by -4.95 Rupees to end at 2352.15 Rupees per 100 kgs. Technically market is under fresh buying as market has witnessed gain in open interest by 7.52% to settled at 118520 while prices up 11 rupees, now Cocudakl is getting support at 2270 and below same could see a test of 2242 levels, and resistance is now likely to be seen at 2322, a move above could see prices testing 2346.

Trading Idea for the day

Cocudakl trading range for the day is 2242-2346.

Cocudakl gained as CCI hiked base price for 2020-21 crop by Rs 500 per candy of 356 kg.

CCI bought over 90 lakh bales of cotton so far this season.

Just four months after Cotton Corporation of India (CCI) started procurement in all its 400 centres across the country

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