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Cotton

Cotton yesterday settled up by 2.09% at 32720 as crops remain threatened due to adverse weather conditions and pest attacks in major growing regions. However upside seen limited as worries of an imminent recession dampened demand for the natural fiber crop. Cotton output is expected to rebound from last years’ experience of unseasonal rain affecting the crop. Production this year is seen at 341.9 lakh bales (170 kg) against 312.03 lakh bales last year. Pakistan’s cotton production has shrunk 19% to 2.19 million bales till September 15, 2022 in the current season mainly due to the devastation caused by heavy rainfall and flash floods nationwide. In Gujarat, new cotton arrival increased, and daily arrival reached 6,000 bales of 170 kg. Ginning mills have started buying seed cotton with the advent of the auspicious festival of Navratri. However, spinning mills are cautious as they expect a downward trend in cotton prices during peak arrival. In its monthly supply-demand report, the 2022/23 U.S. cotton projections include higher beginning stocks, production, exports and ending stocks this month, the USDA's report said. Additionally, the 2022/23 world cotton projections include higher production and ending stocks relative to last month, and lower consumption. 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 -100 Rupees to end at 33370 Rupees.Technically market is under fresh buying as the market has witnessed a gain in open interest by 2.13% to settle at 767 while prices are up 670 rupees, now Cotton is getting support at 32250 and below same could see a test of 31770 levels, and resistance is now likely to be seen at 33270, a move above could see prices testing 33810.

Trading Idea for the day

Cotton trading range for the day is 31770-33810.

Cotton gains as crops remain threatened due to adverse weather conditions and pest attacks in major growing regions.

In Gujarat, new cotton arrival increased, and daily arrival reached 6,000 bales of 170 kg.

Spinning mills are cautious as they expect a downward trend in cotton prices during peak arrival.

Cocudakl

Cocudakl yesterday settled up by 0.8% at 2392 on low level buying after prices dropped 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 dropped by -6.8 Rupees to end at 2690.45 Rupees per 100 kgs.Technically market is under fresh buying as the market has witnessed a gain in open interest by 1.33% to settle at 33520 while prices are up 19 rupees, now Cocudakl is getting support at 2374 and below same could see a test of 2356 levels, and resistance is now likely to be seen at 2414, a move above could see prices testing 2436.

Trading Idea for the day

Cocudakl trading range for the day is 2356-2436.

Cocudakl gained on low level buying after prices dropped due to surging selling pressure at physical market.

Some support seen last week as available stock is estimated to be very limited, the quality of which is also very weak.

Farmers in Pakistan stranded by unprecedented floods are running low on feed for their cattle.

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