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Cotton

Cotton yesterday settled down by -0.04% at 25600 as 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. The Punjab agriculture department directed all eight cotton-growing districts to immediately start a drive to check the spread of pink bollworm after an extensive infestation of the deadly disease was reported in adjoining districts of Haryana and parts of Rajasthan. In September WASDE report, the USDA projected U.S. production at 18.5 million bales, 1.2 million bales higher than the previous month. The agency, however, increased its estimate for U.S. exports by 500,000 bales to 15.5 million bales, leaving its forecast for ending stocks at 3.7 million bales. Fitch Solutions said it expects cotton production in India to fall by one per cent year-on-year to 28.3 million 480lb bales in 2021-22 (previously two per cent growth) due to lacklustre rainfall throughout July and August, the main planting times. Rainfall in Gujarat is almost 30 per cent below its long-term average as of mid-September which has reduced the area available for planting and weighed on yields. In spot market, Cotton dropped by -70 Rupees to end at 26620 Rupees.Technically market is under long liquidation as market has witnessed drop in open interest by -0.44% to settled at 1805 while prices down -10 rupees, now Cotton is getting support at 25520 and below same could see a test of 25440 levels, and resistance is now likely to be seen at 25660, a move above could see prices testing 25720.

Trading Idea for the day

Cotton trading range for the day is 25440-25720.

Cotton prices seen some pressure after a hike in estimated U.S. production in a monthly supply and demand report released by the USDA

The USDA projected U.S. production at 18.5 million bales, 1.2 million bales higher than the previous month.

According to the CCPC, cotton closing stocks, last season were 120.95 lakh bales, and for the current season, they have been estimated at 97.95.

Cocudakl

Cocudakl yesterday settled down by -0.33% at 2440 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 2818.75 Rupees per 100 kgs.Technically market is under fresh selling as market has witnessed gain in open interest by 2.62% to settled at 23150 while prices down -8 rupees, now Cocudakl is getting support at 2428 and below same could see a test of 2416 levels, and resistance is now likely to be seen at 2455, a move above could see prices testing 2470.

Trading Idea for the day

Cocudakl trading range for the day is 2416-2470

Cocudakl prices dropped as crop seems to be in good condition after Gujarat received very good rainfall from last few days.

However downside were limited amid tight supply situation in cottonseed is expected to continue in the coming months considering the stronger demand.

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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