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Cotton

Cotton yesterday settled up by 0.28% at 46670 due to concerns over production, slow arrivals, better domestic and exports demand. Domestic cotton arrivals down 25% or 88.95 lakh bales so far this season to around 238 lakh bales compared to last year. The Telangana government is targeting to increase the area under cotton by 55–65 per cent to about 28–30 lakh hectares (lh) from last year’s 18 lakh hectares even as the cottonseed industry pegged the growth in cotton acreage at 15 per cent in the upcoming kharif season, starting July. As per USDA report, all cotton planted area for coming season (2022) is estimated at 12.2 million acres, up 9 percent from last year. In its latest Apr report, the USDA increase global cotton production forecast in 2021-22 to 120.2 million bales (1 US bale= 218kg), compared to 119.9 million bales in Feb 2022. India’s crop is being unchanged at 26.50 million bales. India allowed duty-free imports of cotton until Sept. 30 as prices in the local market jumped to a record high because of a drop in the production, the government said in a notification. The world's biggest producer of the fibre also removed the Agriculture Infrastructure and Development Cess (AIDC) on the imports, the government said. In spot market, Cotton dropped by -180 Rupees to end at 46400 Rupees.Technically market is under short covering as market has witnessed drop in open interest by -2.54% to settled at 3605 while prices up 130 rupees, now Cotton is getting support at 46030 and below same could see a test of 45400 levels, and resistance is now likely to be seen at 47120, a move above could see prices testing 47580

Trading Idea for the day

Cotton trading range for the day is 45400-47580

Cotton prices rose due to concerns over production, slow arrivals, better domestic and exports demand.

India allowed duty-free imports of cotton until Sept. 30 as prices in the local market jumped to a record high because of a drop in the production.

India allowed duty-free imports of cotton until Sept. 30 as prices in the local market jumped to a record high because of a drop in the production.

India's cotton output is likely to fall to 33.51 million bales in the current year from last year's 35.3 million bales, estimates CAI.

Cocudak

Cocudakl yesterday settled up by 2.46% at 2919 on low level buying after prices dropped as 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. Meanwhile, the world’s largest cotton importer, India, announced it would waive customs duties and a 5% tax on cotton imports until September to alleviate prices in the textile sector. The world's biggest producer of fibre also removed the Agriculture Infrastructure and Development Cess (AIDC) on the imports. In Akola spot market, Cocudakl gained by 8.55 Rupees to end at 3081.2 Rupees per 100 kgs.Technically market is under short covering as market has witnessed drop in open interest by -16.76% to settled at while prices up 70 rupees, now Cocudakl is getting support at 2855 and below same could see a test of 2791 levels, and resistance is now likely to be seen at 2954, a move above could see prices testing 2989.

Trading Idea for the day

Cocudakl trading range for the day is 2791-2989

Cocudakl gained on low level buying after prices dropped s 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

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