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CRUDEOIL

Cotton yesterday settled up by 0.26% at 43150 as crop has been damaged as excessive rains continue to hit parts of the Maharashtra State. According to government sources, if rains continue to hit the State for the next few days more crop is likely to get damaged. However, upside seen limited after CAI reports at least 10% higher sowing is expected compared to previous kharif season’s 12 million hectares. Looking at the current trend, cotton sowing in Maharashtra is expected to cross 4.2 million hectares. In Gujarat, it would be around 2.7 million hectares. The cotton acreage in north will be around 1.5 million hectares and the same for southern states is likely to remain at around 3.5-4.0 million hectare. Reports of severe damage to crop due to heavy rains in Gujarat in the last 4 days, most of the sowings have failed. In Punjab, area under cotton cultivation dips to lowest since 2010, also Cotton crop in Punjab is on radar for second straight year as attack of whitefly, pink bollworm seen, as per the report. China has decided to buy three to five lac tonnes of cotton from international markets for its state reserves. The U.S. 2022/23 cotton projections show lower production, exports, and ending stocks compared with last month. In spot market, Cotton dropped by -100 Rupees to end at 41180 Rupees.Technically market is under fresh buying as market has witnessed gain in open interest by 0.26% to settled at 1160 while prices up 110 rupees, now Cotton is getting support at 42600 and below same could see a test of 42050 levels, and resistance is now likely to be seen at 43470, a move above could see prices testing 43790.

Technical Chart

Trading Idea for the day

Cotton trading range for the day is 42050-43790.

Cotton gains as crop has been damaged as excessive rains continue to hit parts of the Maharashtra State

However, upside seen limited after CAI reports at least 10% higher sowing is expected compared to previous kharif season’s 12 million hectares.

The U.S. 2022/23 cotton projections show lower production, exports, and ending stocks compared with last month.

Cocudakl

Cocudakl yesterday settled up by 0.66% at 2576 on level buying after prices dropped as demand for animal feed commodities has become very weak due to the increase in availability of green fodder. Pressure also seen as price of other cattle feeds being lower than the price of cottonseed oilcake, all the consumers have created a mindset to shift towards other cattle feeds. Global cottonseed production is projected at 44.1 million tons, up 3 percent, with gains in China, India, Turkey, and Uzbekistan. Cottonseed exports are forecast down nearly 2 percent, while crush is projected to grow 3 percent. Cottonseed oil trade is forecast to decline on lower export projections for the United States due to higher domestic demand. The new season for cotton is expected to be good. Retailer expects slight decline in dairy demand as supply uncertainties remain. Further pressure seen as Dairy farmers have demanded a hike in milk price in the midst of rising production cost, and the government has convened a meeting of farmers and farmers’ representatives in Thiruvananthapuram on May 10. Milk procurement prices have been rising, prompting higher revenues for dairy companies but also leading to pressure on margins in FY2023-24, according to a report. The new season for cotton is expected to be good for farmers as the market price of the fiber is currently more than MSP. In Akola spot market, Cocudakl gained by 0.55 Rupees to end at 2734 Rupees per 100 kgs.Technically market is under short covering as market has witnessed drop in open interest by - 0.07% to settled at 59020 while prices up 17 rupees, now Cocudakl is getting support at 2542 and below same could see a test of 2509 levels, and resistance is now likely to be seen at 2596, a move above could see prices testing 2617.

Technical Chart

Trading Idea for the day

Cocudakl trading range for the day is 2509-2617.

Cocudakl gained on level buying after prices dropped as demand for animal feed commodities has become very weak

Global cottonseed production is projected at 44.1 million tons, up 3 percent

Cottonseed exports are forecast down nearly 2 percent, while crush is projected to grow 3 percent.

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