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COTTON

Cotton yesterday settled down by -1.62% at 32240 as India’s domestic cotton demand for the 2022-23 season up to September is estimated to be lower by about 18 lakh bales (170 kg each) at 300 lakh bales or nearly 6 per cent less than last year’s 318 lakh bales, the Cotton Association of India (CAI) has estimated. The association’s Cotton Crop Committee meeting attributed the decline in domestic consumption to a reduction in operations of mills due to slack demand for yarn and cloth. India is likely to produce 34.4 million bales of cotton in the 2022/23 season that started on Oct. 1, up 12% from a year ago after farmers expanded the crop area. India’s cotton output for the season ended September 30, 2022, fell to 307.5 lakh bales (against 360.13 lakh bales estimated at the beginning of the season in October last year. This is the lowest since 2007-08, when the production was 307 lakh bales. WASDE report said world trade is projected to be nearly 1 million bales lower from September, with declines in imports by China, Pakistan, Mexico, Turkey and Vietnam. The agency lowered its U.S. exports forecast by 100,000 bales to 12.5 million bales, while also cutting export estimates for Australia, Brazil, India, Benin, Cote d’Ivoire, Greece and Mexico. "In the 2022/23 world balance sheet this month, consumption is 3.0 million bales lower and ending stocks are 3.1 million bales higher," the USDA said. In spot market, Cotton dropped by -300 Rupees to end at 33100 Rupees.Technically market is under long liquidation as the market has witnessed a drop in open interest by -3.48% to settle at 1911 while prices are down -530 rupees, now Cotton is getting support at 32020 and below same could see a test of 31810 levels, and resistance is now likely to be seen at 32620, a move above could see prices testing 33010.

Trading Idea for the day

Cotton trading range for the day is 31810-33010

Cotton dropped as India’s domestic cotton demand set to dip 6% in 2022-23

Spinning mills operated at 40-60 per cent capacity in the first quarter, which may cause cotton consumption to drop

Data from CFTC showed that speculators cut their net short position on cotton futures

COCUDAKL

Cocudakl yesterday settled down by -2.65% at 2679 on profit booking after prices gained in last some sessions as available stock is estimated to be very limited, the quality of which is also very weak. Reports of rising area under cotton and increased availability of green fodder kept cotton seed oil cake prices down. Support also seen after reports that there is a forecast of damage due to heavy rains after sowing of cotton in Vidarbha and Khandesh parts of Maharashtra. Sporadic arrivals of new cotton have already started in Haryana and Punjab, while the arrival of new cotton will start in Khandesh at the end of August and in Madhya Pradesh in September. All India Mandi arrivals of Kapas fell by around 82% on M-o-M basis; they were also lower by around 19% on Y-o-Y basis. Gujarat is a major producer of cotton across the country and reports of increase in sowing of cotton by at least 20% in Gujarat are coming. As per CAI, total cotton supply till end of the cotton season 2021-22 is estimated at 402.16 lakh bales of 170 kg each, lower by around 18% as compared to 488 lakh bales last year. Cocudakl’s stock in NCDEX warehouse reduced from 21 lakh sacks to 7.50 lakh sacks. 60 to 70% of Cocudakl’s stock in Gujarat is estimated to be weak quality stock. In Akola spot market, Cocudakl dropped by -39.05 Rupees to end at 3184.25 Rupees per 100 kgs.Technically market is under long liquidation as the market has witnessed a drop in open interest by -7.46% to settle at 36200 while prices are down -73 rupees, now Cocudakl is getting support at 2626 and below same could see a test of 2573 levels, and resistance is now likely to be seen at 2772, a move above could see prices testing 2865.

Trading Idea for the day

Cocudakl trading range for the day is 2573-2865.

Cocudakl dropped on profit booking after prices gained in last some sessions as available stock is estimated to be very limited, the quality of which is also very weak.

Farmers in Pakistan stranded by unprecedented floods are running low on feed for their cattle.

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

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