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Cotton

Cotton yesterday settled up by 0.76% at 25350 as cotton acreage this year is lower by 5.75 per cent at 119.66 lakh hectares, as per Agriculture Ministry’s latest data. The new cotton crop has begun arriving in northern markets, Karnataka and Telangala with prices of kapas (raw cotton) ruling at least 10 per cent higher than the minimum support price (MSP) levels fixed by the Centre for the new season starting October. The overall crop condition is good as on date and, based on the feedback from the 10 growing States, the yield will be much higher this year and quality very good. The demand is slow as most of the spinning mills have covered their needs till December. If the moisture comes down, demand may improve over the next couple of weeks. The latest spell of heavy rains in Gujarat may appear to have saved the State from sinking into a drought, but for the current kharif crops such as cotton, it has pushed back the harvest period by at least 15 days and also weakened the prospects of kharif groundnut due to waterlogging. In September WASDE report, the USDA projected U.S. production at 18.5 million bales, 1.2 million bales higher than the previous month. In spot market, Cotton dropped by -70 Rupees to end at 26490 Rupees.Technically market is under short covering as market has witnessed drop in open interest by -4.58% to settled at 1856 while prices up 190 rupees, now Cotton is getting support at 25110 and below same could see a test of 24860 levels, and resistance is now likely to be seen at 25580, a move above could see prices testing 25800.

Trading Idea for the day

Cotton trading range for the day is 24860-25800

Cotton prices gained Cotton acreage this year is lower by 5.75 per cent at 119.66 lakh hectares

The new cotton crop has begun arriving in northern markets, Karnataka and Telangala

The overall crop condition is good as on date and, based on the feedback from the 10 growing States

Cocudakl

Cocudakl yesterday settled up by 3.39% at 2502 amid tight supply situation in cottonseed is expected to continue in the coming months considering the stronger demand. However upside seen limited as crop seems to be in good condition after Gujarat received very good rainfall from last few days. Cotton production will still be high because of good rains and may touch 350-360 lakh bales despite the area under coverage has gone down by 6-8%, from 133 lakh hectares last year to 125 lakh hectares in the current season. The U.S. Department of Agriculture forecast lower production and also cut ending stocks estimates for the 2021/22 marketing year in a monthly report. In its WASDE report, the USDA projected lower U.S. production, exports and ending stocks compared with July, as well as lower world 2021/22 ending stocks. CAI in its July estimate of the cotton crop for the season 2020-21 beginning October 1, 2020, has reduced the crop estimate by 1.50 lakh bales to 354.50 lakh bales from its previous estimate of 356 lakh bales. The CAI has maintained its cotton crop estimate for the Northern Zone at the same level as in its previous month’s estimate i.e. at 65.50 lakh bales. In Akola spot market, Cocudakl dropped by -23.55 Rupees to end at 2800 Rupees per 100 kgs.Technically market is under fresh buying as market has witnessed gain in open interest by 7.51% to settled at 26190 while prices up 82 rupees, now Cocudakl is getting support at 2442 and below same could see a test of 2382 levels, and resistance is now likely to be seen at 2536, a move above could see prices testing 2570.

Trading Idea for the day

Cocudakl trading range for the day is 2382-2570

Cocudakl gained amid tight supply situation in cottonseed is expected to continue in the coming months considering the stronger demand

However upside seen limited as crop seems to be in good condition after Gujarat received very good rainfall from last few days.

The cotton crop estimate for the Central Zone has been reduced by 0.50 lakh bales to 193.50 lakh bales

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