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Cotton

Fundamentals

Cotton yesterday settled down by -0.68% at 22020 on profit booking after prices gained as India’s cotton exports are likely to hit 60 lakh bales for the current season on cost competitiveness. ICA has noted that so far about 60 per cent or 36 lakh bales has been shipped since the start of the season. For the cotton crop, CAI has revised its output projections downward to 358.5 lakh bales, lower by about 1.5 lakh bales from previous estimate. CAI, in its latest crop outlook for March, stated that India’s cotton imports will be around 12 lakh bales for the year, which is lower by about 2 lakh bales from the earlier estimated. Cotton has grown so much after the last three years, which will undoubtedly increase farmers' interest in cotton cultivation in the next season. 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. According to the latest update from the International Cotton Advisory Committee (ICAC), stock levels are forecast to be down 1% on last year. 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. In spot market, Cotton gained by 20 Rupees to end at 22150 Rupees. Technically market is under long liquidation as market has witnessed drop in open interest by -7.38% to settled at 5745 while prices down - 150 rupees, now Cotton is getting support at 21900 and below same could see a test of 21770 levels, and resistance is now likely to be seen at 22220, a move above could see prices testing 22410

Trading Idea for the day

Cotton trading range for the day is 21770-22410

Cotton dropped on profit booking after prices gained as India’s cotton exports are likely to hit 60 lakh bales

Cotton prices in the country have risen by more than 15 per cent from its MSP.

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.

Cocudakl

Fundamentals

Cocudakl yesterday settled up by 0.46% at 2424 due to demand from animal feeders and weak supply. Considering the rise in binola and supply, the possibility of a fall in the coming days may be less market compelling. Around 25 to 30 lakh bags of cottonseed cake are lying in Kadi, its more than estimated. All mills of cottonseed in Kadi will be demolished in no time, after that barely seven to eight mills are expected to be operational. Khali stock is very low in centers other than Kadi. There is a possibility of one to two lakh sacks of stock in some traditional centers. Cottonseed stock is estimated to be very low all over Gujarat. Retail demand is currently very sluggish in Cottonseed Khali. Most of the ginning units across the country have been closed in the month of March due to declining cotton income. New season cotton sowing has not even started. There is still six months left for the new season. Most of the ginning units are coming off due to closure. Most of the cottonseed-khali producers of Gujarat were in a recession a month ago, they sold cottonseed and cottonseed khali extensively in Maharashtra, Madhya Pradesh and other states of the countryWith CCI introducing MSP (Minimum Support Price) to cotton farmers, farmers came to the market to sell cotton faster. In Akola spot market, Cocudakl dropped by -4.95 Rupees to end at 2486.1 Rupees per 100 kgs. Technically market is under short covering as market has witnessed drop in open interest by -0.64% to settled at 124880 while prices up 11 rupees, now Cocudakl is getting support at 2399 and below same could see a test of 2375 levels, and resistance is now likely to be seen at 2440, a move above could see prices testing 2457.

Trading Idea for the day

Cocudakl trading range for the day is 2375-2457.

Cocudakl gains due to demand from animal feeders and weak supply

Around 25 to 30 lakh bags of cottonseed cake are lying in Kadi, its more than estimated.

Most of the active crushing mills in Kadi are only 7 to 8 mills

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