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Cotton

Cotton yesterday settled down by -0.96% at 23710 as crop sowing accelerates as India's annual monsoon rains have covered two-third of the country, nearly a fortnight ahead of the normal schedule, a weather department official said, adding that conditions are favourable for further advancement into the northwestern parts this week. USDA kept the production estimate unchanged but hiked its projections for U.S. 2021/22 exports, cut ending stocks. Cotton sowing area grows despite of delays. Despite sowing of cotton stretching beyond the ideal sowing time in Punjab, it is close to reaching the target for 2021-22. The state agriculture department had the target of sowing cotton on 3.25 lakh hectares the crop had been sown over 3.01 lakh hectares. New figures show global cotton stock levels are set to increase to 22m tonnes by the end of 2020/21 as the stocks-to-use ratio declines. According to the latest update from the International Cotton Advisory Committee (ICAC), China’s stocks, however, are expected to decline as the rest of the world’s expands slightly. Cotton consumption is expected to increase by 2% to 25.3m tonnes as the global economy continues to recover. In spot market, Cotton dropped by -230 Rupees to end at 24240 Rupees.Technically market is under long liquidation as market has witnessed drop in open interest by -6.99% to settled at 4164 while prices down -230 rupees, now Cotton is getting support at 23430 and below same could see a test of 23160 levels, and resistance is now likely to be seen at 24110, a move above could see prices testing 24520.

Trading Idea for the day

Cotton trading range for the day is 23160-24520.

Cotton prices dropped as crop sowing accelerates as monsoon covers two – third of India earlier than usual.

USDA kept the production estimate unchanged but hiked its projections for U.S. 2021/22 exports, cut ending stocks.

Cotton stock levels are set to increase to 22m tonnes by the end of 2020/21

Cocudakl

Cocudakl yesterday settled down by -2.03% at 2851 on profit booking after prices seen supported 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 dropped by -26.95 Rupees to end at 2892.65 Rupees per 100 kgs.Technically market is under fresh selling as market has witnessed gain in open interest by 3.68% to settled at 79370 while prices down -59 rupees, now Cocudakl is getting support at 2819 and below same could see a test of 2788 levels, and resistance is now likely to be seen at 2888, a move above could see prices testing 2926.

Trading Idea for the day

Cocudakl trading range for the day is 2788-2926.

Cocudakl dropped on profit booking after prices remained supported 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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