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Cotton

Cotton yesterday settled down by -0.2% at 25450 as crop seems to be in good condition after Gujarat received very good rainfall from last night. Consumption by mills is strong and there is good demand for yarn. The Centre has fixed an MSP for medium staple cotton at Rs 5,716 per quintal for the 2021-22 season, higher than the previous year’s Rs 5,515. For the long-staple cotton, the MSP for 2021-22 has been fixed at Rs. 6,025 per quintal, against Rs 5,825 in the previous year. Around 19 quintals of raw cotton has arrived in Bathinda grain market with the starting of the week. The cotton prices are higher and farmers are getting Rs.300- 400 per quintal more than the MSP. Cotton Corporation of India is expected to enter the market in October for the new season. The low pressure creating in Bay of Bengal will bring good rain in Gujarat and adjourning parts of Rajasthan. A much needed for the standing kharif crop. 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. In the domestic market prices are capped as higher supplies in the Gujarat & Maharashtra spot markets due to easing lockdown. In spot market, Cotton dropped by -70 Rupees to end at 26720 Rupees.Technically market is under fresh selling as market has witnessed gain in open interest by 2.03% to settled at 1756 while prices down -50 rupees, now Cotton is getting support at 25220 and below same could see a test of 25000 levels, and resistance is now likely to be seen at 25610, a move above could see prices testing 25780.

Trading Idea for the day

Cotton trading range for the day is 25000-25780'

Cotton prices dropped as crop seems to be in good condition after Gujarat received very good rainfall from last night.

Cotton ginners across the country are hopeful of a better season in 2021-22

New cotton arrivals have started in Bathinda Mandi

Cocudakl

Cocudakl yesterday settled down by -2.94% at 2641 as 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, as kapas prices are likely to rule above the minimum support prices (MSP) for a better part of the season. However downside seen limited amid tight supply situation in cottonseed is expected to continue in the coming months considering the stronger demand. The Cotton Association of India (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 (equivalent to 378.25 lakh running 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. "There is a reduction of 2.50 lakh bales in the crop estimate for Gujarat state, while the crop estimates of Maharashtra & Madhya Pradesh have been increased by 1.50 lakh bales and 0.50 lakh bales respectively compared to the estimates of these states made in the previous month," CAI said. In Akola spot market, Cocudakl dropped by -23.55 Rupees to end at 2955 Rupees per 100 kgs.Technically market is under long liquidation as market has witnessed drop in open interest by -5.25% to settled at 49280 while prices down -80 rupees, now Cocudakl is getting support at 2581 and below same could see a test of 2520 levels, and resistance is now likely to be seen at 2716, a move above could see prices testing 2790.

Trading Idea for the day

Cocudakl trading range for the day is 2520-2790.

Cocudakl dropped as cotton production will still be high because of good rains and may touch 350-360 lakh bales

CAI in its July estimate of the cotton crop for the season 2020-21, has reduced the crop estimate by 1.50 lakh bales to 354.50 lakh bales

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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