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COTTON

Cotton yesterday settled up by 0.08% at 23730 paring gains seen earlier as sowing of cotton may be delayed in India as the southwest monsoon, is set to reach the mainland two days later than usual. Cotton Cooperation of India has increased prices by 200-500 Rs Candy across all growths of all Zones for 2020-21 season and for 2019-20 season. Cotton crop is at risk due to water shortage in Sindh and Punjab. The increasing trend in the rate of cotton remained continued in international markets. Agriculture Minster Punjab Hussain Jahanian Gardezi said that Punjab is facing water shortage of 22 % while Sindh is facing shortage of around 17%.According to the Third Advance Estimate released by the government, cotton production is estimated at 36.49 million bales higher by 4.59 million bales than the average cotton production. In the previous season 2019-20 cotton production was estimated at 36.07 million bales. The U.S. Department of Agriculture's (USDA) weekly export sales report showed net sales of 171,200 Running Bales for the 2020/2021 marking year, 59% higher than the prior week. CAI has revised higher Indian cotton export estimates for 2020-21 season at 65 lakh bales against 60 lakh bales projected till last month. Cotton production in Haryana is expected to decline by 27 percent to 1.8 million bales in 2020-21 (JulyJune) season due to yield loss. In spot market, Cotton gained by 150 Rupees to end at 23650 Rupees.Technically market is under fresh buying as market has witnessed gain in open interest by 0.28% to settled at 7288 while prices up 20 rupees, now Cotton is getting support at 23610 and below same could see a test of 23500 levels, and resistance is now likely to be seen at 23830, a move above could see prices testing 23940.

Trading Idea for the day

Cotton trading range for the day is 23500-23940.

Cotton settled flat paring gains seen earlier as sowing of cotton may be delayed in India

The country’s cotton exports are likely to be 20 percent higher at 1.02 million tonnes in 2020-21.

Cotton crop is at risk due to water shortage in Sindh and Punjab.

Cocudakl

Cocudakl yesterday settled up by 2.09% at 2829 as 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. Support also seen amid prospects of higher exports and falling supply in the physical market. However there were worries of lockdown it is anticipated that there will be slow supply and same with demand. 2021/22 global cottonseed production is projected at nearly 44 million tons, up 5 percent from the current year. Higher forecasts for the United States, Brazil, Australia, and Mali are partially offset by declines in China. U.S. production is forecast up 781,000 tons to nearly 5 million. 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. In Akola spot market, Cocudakl gained by 18.9 Rupees to end at 2850.5 Rupees per 100 kgs.Technically market is under short covering as market has witnessed drop in open interest by -6.76% to settled at 74350 while prices up 58 rupees, now Cocudakl is getting support at 2772 and below same could see a test of 2716 levels, and resistance is now likely to be seen at 2862, a move above could see prices testing 2896.

Trading Idea for the day

Cocudakl trading range for the day is 2716-2896

Cocudakl gained as Cottonseed production and quality were affected

However there were worries of lockdown it is anticipated that there will be slow supply and same with demand.

2021/22 global cottonseed production is projected at nearly 44 million tons, up 5 percent from the current year.

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