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Cotton

Cotton yesterday settled up by 1.26% at 31390 as Cotton Association of India (CAI), a body of traders, has reduced its estimate of the cotton crop last season (October 2020- September 2021) to 353 lakh bales (each 170 kg) from its previous estimate of 354.5 lakh bales. The final estimate is about 7 lakh bales lower than the 360 lakh bales of crop estimated initially. The total cotton availability for the year is estimated at 488 lakh bales, including an opening stock of 125 lakh bales and import of 10 lakh bales besides the 353 lakh bales of crop. As per the CAI’s cotton balance-sheet for the year, the closing stock is estimated to be 75 lakh bales, which is lower than last year’s estimated 107.5 lakh bales of carryover stock. CAI has increased its cotton consumption estimate for the year by 5 lakh bales to 335 lakh bales from last year’s estimated consumption of 250 lakh bales, showing an increase of 34 per cent over last year. The U.S. Department of Agriculture's (USDA) latest weekly export sales report showed a 41% drop from the previous week in net sales for 2021/2022. In spot market, Cotton gained by 160 Rupees to end at 30510 Rupees.Technically market is under fresh buying as market has witnessed gain in open interest by 7.99% to settled at 2891 while prices up 390 rupees, now Cotton is getting support at 31030 and below same could see a test of 30680 levels, and resistance is now likely to be seen at 31600, a move above could see prices testing 31820.

Trading Idea for the day

Cotton trading range for the day is 30680-31820

Cotton prices seen supported as Cotton trade body trims 2020-21 crop estimate to 353 lakh bales

CAI has increased its cotton consumption estimate for the year by 5 lakh bales to 335 lakh bales

USDA latest weekly export sales report showed a 41% drop from the previous week in net sales for 2021/2022.

Cocudakl

Cocudakl yesterday settled up by 0.93% at 2491 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. 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 -17.5 Rupees to end at 2720 Rupees per 100 kgs.Technically market is under short covering as market has witnessed drop in open interest by -0.61% to settled at while prices up 23 rupees, now Cocudakl is getting support at 2446 and below same could see a test of 2401 levels, and resistance is now likely to be seen at 2522, a move above could see prices testing 2553.

Trading Idea for the day

Cocudakl trading range for the day is 2401-2553

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.

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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