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Cotton

Cotton yesterday settled down by -1.04% at 47610 due to the high price of cotton, the Spinners' Association of South India has announced the closure of the mills, due to which most of the smaller mills have closed down and the demand for cotton will be seen to decrease due to decrease in production in the big mills. In North India's states of Punjab, Haryana and Rajasthan, the water from canals will be released late, which will lead to late sowing of cotton, but there is no report of the possibility of very low sowing. Cotton sowing in North India is expected to increase by 15% from last year. Texas, had concerns about production due to lack of rainfall, but with good rainfall in Texas for the past one week, there is no problem with U.S. cotton production. Cotton sowing in China has increased, but with only one to two percent increased, the crop is unlikely to grow much. Similarly, in Pakistan, production is also expected to increase due to increase in sowing from last year. The USDA in its latest report lowered U.S. production by one million bales as the drought situation in Texas is predicted to reduce harvested acres. In spot market, Cotton dropped by -350 Rupees to end at 49110 Rupees.Technically market is under fresh selling as market has witnessed gain in open interest by 6.49% to settled at 2558 while prices down -500 rupees, now Cotton is getting support at 47420 and below same could see a test of 47230 levels, and resistance is now likely to be seen at 47910, a move above could see prices testing 48210.

Trading Idea for the day

Cotton trading range for the day is 47230-48210. Cocudakl trading range for the day is 2807-2931.

Cotton dropped as most of the smaller mills in South India have stopped production and the big mills have reduced the production.

Indian cotton's base being much higher than that of the foreign market has increased the compatibility for imports

With increased import of cotton, the carryforward stock is expected to rise to 45 lakh bales at the end of the season.

Cocudakl

Cocudakl yesterday settled up by 1.94% at 2884 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 8.75 Rupees to end at 3061.2 Rupees per 100 kgs.Technically market is under short covering as market has witnessed drop in open interest by -5.67% to settled at while prices up 55 rupees, now Cocudakl is getting support at 2845 and below same could see a test of 2807 levels, and resistance is now likely to be seen at 2907, a move above could see prices testing 2931.

Trading Idea for the day

Cocudakl trading range for the day is 2807-2931.

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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