Cocudakl trading range for the day is 2471-2555 - Kedia Advisory
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Cotton
Cotton yesterday settled up by 1.29% at 30530 as India’s 2021-22 cotton consumption is forecast at a record 25.5 million bales and exports are projected at the second-highest level in 8 years at 5.8 million. This level of total use is forecast to lower ending stocks to 12.4 million bales, down nearly 4 million compared with the record level two years prior, according to US Department of Agriculture (USDA). Cotton stock levels in India nearly doubled to a record two years ago primarily due to two factors. First, production soared 3.0 million bales while consumption fell over 4.0 million. Second, India’s seed cotton prices fell below the Minimum Support Price (MSP), which drove record state purchases and storage of cotton lint in cotton year (CY) 2020 by the Cotton Corporation of India (CCI). However, due to record sales the next season, i.e. in 2020-21, CCI’s record stock levels quickly fell. Mills and exporters were eager buyers, with 2020- 21 domestic consumption rising 4.0 million bales and exports at their highest in seven years at 6.2 million, the USDA report said. The USDA also raised global ending stock estimate by 450,000 bales to 87.13 million bales. Meanwhile, the agency lowered China consumption by 1 million bales, citing high prices and energy crisis denting industrial activity. In spot market, Cotton gained by 110 Rupees to end at 28820 Rupees.Technically market is under fresh buying as market has witnessed gain in open interest by 1.37% to settled at 2005 while prices up 390 rupees, now Cotton is getting support at 30220 and below same could see a test of 29920 levels, and resistance is now likely to be seen at 31080, a move above could see prices testing 31640.
Trading Idea for the day
Cotton trading range for the day is 29920-31640.
Cotton prices gained as India to see record cotton consumption & strong exports in 2021-22
USDA also raised global ending stock estimate by 450,000 bales to 87.13 million bales.
USDA lowered China consumption by 1 million bales, citing high prices and energy crisis denting industrial activity.
COCUDAKL
Cocudakl yesterday settled up by 0.32% at 2506 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 -6.05 Rupees to end at 2749.15 Rupees per 100 kgs.Technically market is under fresh buying as market has witnessed gain in open interest by 5.36% to settled at 32610 while prices up 8 rupees, now Cocudakl is getting support at 2489 and below same could see a test of 2471 levels, and resistance is now likely to be seen at 2531, a move above could see prices testing 2555.
Trading Idea for the day
Cocudakl trading range for the day is 2471-2555.
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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