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COTTON

Cotton yesterday settled down by -3.14% at 30820 as pressure seen after the UKbased Cotton Outlook has scaled up its estimate for global production in 2021-22 (Aug-Jul) by 97,000 tn to 26.0 mln tn, the agency said in its November report. The estimate has been revised upward as production in the African Franc zone and Turkey is expected to be higher. The agency has maintained its output estimate in the US at 3.92 mln tn. The outlook for cotton production in India, the largest producer, has been maintained at 6.17 mln tn. The production in China is seen at 5.71 mln tn. The agency maintained its estimate for global consumption in 2021- 22 at 26.15 mln tn. Global cotton ending stocks are estimated at 110,000 tn for the ongoing 2021-22 season. Arrivals of cotton in spot markets were at 184,300 bales (1 bale = 170 kg), higher than 171,500 bales on Monday. Of the total quantity, around 10,000 bales arrived in Haryana, 2,800 in Punjab, and 17,000 bales in Rajasthan. Arrivals were pegged at 42,000 bales in Gujarat, around 15,000 bales in Madhya Pradesh, and 44,000 bales in Maharashtra. Nearly 10,000 bales arrived in Karnataka, 3,500 in Odisha, and 40,000 bales in Telangana and Andhra Pradesh combined. In spot market, Cotton dropped by -200 Rupees to end at 31420 Rupees.Technically market is under long liquidation as market has witnessed drop in open interest by -2.95% to settled at 4765 while prices down - 1000 rupees, now Cotton is getting support at 30480 and below same could see a test of 30150 levels, and resistance is now likely to be seen at 31370, a move above could see prices testing 31930.

Technical Chart

Trading Range

Cotton trading range for the day is 30150-31930.

Cotton prices dropped as pressure seen after Cotton Outlook has scaled up its estimate for global production in 2021-22 by 97,000 tn to 26.0 mln tn

Arrivals of cotton in spot markets were at 184,300 bales, higher than 171,500 bales on Monday

Chief Minister M.K. Stalin urged Union Textiles Minister Piyush Goyal to remove the 11% import duty on cotton.

COCUDAKL

Cocudakl yesterday settled up by 0.92% at 2747 amid tight supplies owing to higher input costs with rising global demand. Cotton consumption is consistently on the rise due to increasing demand and mitigating impact of COVID-19 in India, Pakistan, Mexico and Bangladesh. Meanwhile the USDA in its latest monthly report estimated global production to go up due to better crop yields in Brazil, Australia and Pakistan. Elsewhere, it is reported that the US is looking to expand cotton exports to Bangladesh, the world’s second largest importer of cotton whereas in Pakistan, cotton arrivals to ginneries reached over 6.8 million bales, up 70% from a year earlier. The Cotton Association of India (CAI) estimated cotton output at 360.13 lakh bales for the crop year (October-September) 2021- 22, due to expectation of better yield. The total cotton production in the last season is estimated at 353 lakh bales, which is 7.13 lakh bales less than the current season, the CAI said in a statement. “The cotton yield is estimated to be excellent and the farmers are expected to go for the third and fourth pickings due to good availability of water following a good monsoon,” CAI president Atul Ganatra told PTI. In Akola spot market, Cocudakl gained by 28.25 Rupees to end at 2750 Rupees per 100 kgs.Technically market is under fresh buying as market has witnessed gain in open interest by 8.46% to settled at while prices up 25 rupees, now Cocudakl is getting support at 2690 and below same could see a test of 2634 levels, and resistance is now likely to be seen at 2807, a move above could see prices testing 2868.

Technical Chart

Trading Range

Cocudakl trading range for the day is 2634-2868.

Cocudakl prices gained amid tight supplies owing to higher input costs with rising global demand.

However upside seen limited on concerns of new variant of coronavirus, Omicron.

Cotton consumption is consistently on the rise due to increasing demand and mitigating impact of COVID-19 in India

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