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COTTON

Cotton yesterday settled up by 0.46% at 21850 as China announced additional import quotas for the natural fiber. The Government of India’s top cotton crop assessment body has projected cotton consumption to dip by a little more than 8 per cent owing to the latest Covid-19 wave and the subsequent lockdowns in several States. The Union Ministry of Textiles’ Committee on Cotton Production and Consumption (COCPC) has reduced cotton consumption for season 2020-21 (October to September period) from 330 lakh bales (each of 170 kg) to 303 lakh bales, primarily due to the current lockdowns as the severe second wave of Covid has gripped the entire nation. In the COCPC meeting held on April 30, the estimated cotton closing stock has been increased from the earlier projected 98.79 lakh bales to 118.79 lakh bales at the end of the season on September 30, 2021. The COCPC, which was formed in September 2020 replacing the erstwhile Cotton Advisory Board (CAB), has also curtailed the projected cotton output for the season from the earlier estimated 371 lakh bales to 360 lakh bales. China's National Development and Reform Commission (NDRC) said it had issued an additional 700,000 tonnes quota for cotton imports this year, all of which is for nonstate traders and will be subject to a sliding scale tariffs system. In spot market, Cotton gained by 110 Rupees to end at 22090 Rupees.Technically market is under short covering as market has witnessed drop in open interest by -1.59% to settled at 8004 while prices up 100 rupees, now Cotton is getting support at 21760 and below same could see a test of 21660 levels, and resistance is now likely to be seen at 21940, a move above could see prices testing 22020.

Trading Idea for the day

Cotton trading range for the day is 21660-22020

Cotton prices gained as China announced additional import quotas for the natural fiber.

COCPC projects season 2020-21 consumption at 303 lakh bales, down from 330 lakh bales

The estimated cotton closing stock has been increased from the earlier projected 98.79 lakh bales to 118.79 lakh bales

Cocudakl

Cocudakl yesterday settled up by 0.15% at 2608 due to a scarcity of cottonseed in spot markets, amid a broad rally in the edible oil complex. A sharp rally in the edible oil complex has also supported prices of cotton wash oil, as there is higher demand for cotton seed for crushing purposes. Waning arrivals of raw cotton due to the fag end of the season and limited stocks of cottonseed with ginners has led to a supply crunch in the market. India has produced around 36 mln bales in the ongoing 2020-21 (Oct-Sep) season, of which nearly 33 mln bales, or 92% of the stock, has already arrived in the market. Considering firm demand outlook for the commodity, the tight supply situation in cottonseed is expected to continue in the coming months as well as the new season for cotton will start only in October. Farmers may increase the area under cotton in the upcoming kharif season due to forecast of a good monsoon by the India Meteorological Department, as well as expectations of higher prices. Cottonseed production and quality were affected last year due to excessive rains in the key producing State of Telangana and some parts of Tamil Nadu. In Akola spot market, Cocudakl gained by 32.95 Rupees to end at 2750.45 Rupees per 100 kgs.Technically market is under fresh buying as market has witnessed gain in open interest by 6.14% to settled at 70220 while prices up 4 rupees, now Cocudakl is getting support at 2592 and below same could see a test of 2576 levels, and resistance is now likely to be seen at 2634, a move above could see prices testing 2660.

Trading Idea for the day

Cocudakl trading range for the day is 2576-2660

Cocudakl gained due to a scarcity of cottonseed in spot markets, amid a broad rally in the edible oil complex.

Cottonseed production and quality were affected last year due to excessive rains in Telangana and some parts of Tamil Nadu.

India has produced around 36 mln bales in the ongoing 2020-21 season, of which nearly 92% of the stock

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