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Cotton

Cotton yesterday settled down by -2.19% at 48300 as the area under cotton is seen expanding in North India during the current kharif season, mainly in Haryana and Rajasthan. The trade expects the area to increase by 10-15 per cent. Seed firms say acreage may not rise as growers face water, weather problems. Global supplies in 2022/23 are projected below a year earlier, as lower beginning stocks more than offset a 2.6-million-bale increase in production, with consumption and ending stocks also lower, the USDA said. Indian traders and spinning mills should first meet demand from the local textile industry and only then export surplus raw cotton and yarn, Textile Minister Piyush Goyal told industry officials in a meeting. The minister's comments came after textile mills in the southern state of Tamil Nadu, a leading exporter of garments, went on a two-day strike earlier this week demanding a ban on exports. Goyal asked all stakeholders to resolve cotton and yarn price issues through collaboration rather than competition, without pushing the government to intervene as it may have long term impact on the cotton value chain. The USDA in its monthly report projected lower global supplies, consumption and ending stocks in 2022/23, while export sales data showed net sales of cotton for 2021/2022 fell 88% from the previous week and 76% from the prior 4-week average. In spot market, Cotton dropped by -260 Rupees to end at 50270 Rupees.Technically market is under long liquidation as market has witnessed drop in open interest by -16.73% to settled at 1578 while prices down -1080 rupees, now Cotton is getting support at 47310 and below same could see a test of 46310 levels, and resistance is now likely to be seen at 49480, a move above could see prices testing 50650.

Trading Idea for the day

Cotton trading range for the day is 46310-50650

Cotton dropped as area to increase by 10-15 per cent in North India.

Seed firms say acreage may not rise as growers face water, weather problems

Global supplies in 2022/23 are projected below a year earlier

Cocudakl

Cocudakl yesterday settled up by 0.18% at 2797 on low level buying after prices dropped as Global cottonseed production is projected at 44.1 million tons, up 3 percent, with gains in China, India, Turkey, and Uzbekistan. Cottonseed exports are forecast down nearly 2 percent, while crush is projected to grow 3 percent. Cottonseed oil trade is forecast to decline on lower export projections for the United States due to higher domestic demand. The new season for cotton is expected to be good. Retailer expects slight decline in dairy demand as supply uncertainties remain. Further pressure seen as Dairy farmers have demanded a hike in milk price in the midst of rising production cost, and the government has convened a meeting of farmers and farmers’ representatives in Thiruvananthapuram on May 10. Milk procurement prices have been rising, prompting higher revenues for dairy companies but also leading to pressure on margins in FY2023-24, according to a report. The new season for cotton is expected to be good for farmers as the market price of the fiber is currently more than MSP. Pressure seen in cotton also amid expectations of higher supply from the US and lower global demand. In its latest April report, the USDA increased the global cotton production forecast in 2021-22 to 120.2 million bales, compared to 119.9 million bales in Feb 2022. In Akola spot market, Cocudakl gained by 1.7 Rupees to end at 3028.65 Rupees per 100 kgs.Technically market is under short covering as market has witnessed drop in open interest by -1.21% to settled at while prices up 5 rupees, now Cocudakl is getting support at 2774 and below same could see a test of 2751 levels, and resistance is now likely to be seen at 2829, a move above could see prices testing 2861.

Trading Idea for the day

Cocudakl trading range for the day is 2751-2861.

Cocudakl recovered on low level buying after prices dropped as Global cottonseed production is projected at 44.1 million tons, up 3 percent

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

Cottonseed oil trade is forecast to decline on lower export projections for the United States due to higher domestic demand.

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