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Cotton

Cotton yesterday settled up by 2.73% at 49970 as 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. Global production is lowered 1.8 million bales from last month, largely due to a drop of 1.0 million bales from India. Global use is down 1.1 million bales, and ending stocks are up 271,000 bales. Global trade is down slightly with a drop of 500,000 bales in India exports. Additionally, imports are lower for China, Pakistan, and Vietnam. U.S. production is slightly lowered to 17.5 million bales, exports are unchanged at 14.8 million, and ending stocks are lowered to 3.4 million bales. The projected U.S. season-average farm price is up 1 cent to a record 92 cents per pound. Global ending stocks for most major producing and consuming countries are slightly lower compared with the previous year. Despite higher global production and lower consumption, drastically lower carryin compared with the previous year is projected to cap any significant rise in stock levels. This is especially relevant to China and India, where 2022/23 carrying levels are significantly below the previous year. Lower government and/or state trading enterprise stocks in both countries show the most significant difference compared with the previous year’s beginning stocks. In spot market, Cotton gained by 1220 Rupees to end at 49490 Rupees.Technically market is under short covering as market has witnessed drop in open interest by -9.8% to settled at 2698 while prices up 1330 rupees, now Cotton is getting support at 49290 and below same could see a test of 48620 levels, and resistance is now likely to be seen at 50340, a move above could see prices testing 50720.

Trading Idea for the day

Cotton trading range for the day is 48620-50720.

Cotton gains and crosses 50000 mark as Global supplies in 2022/23 are projected below a year earlier

Global production is lowered 1.8 million bales from last month, largely due to a drop of 1.0 million bales from India.

Global ending stocks for most major producing and consuming countries are slightly lower compared with the previous year.

Cocudakl

Cocudakl yesterday settled down by -1.72% at 2865 after update that 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 dropped by -8.65 Rupees to end at 3086.25 Rupees per 100 kgs.Technically market is under fresh selling as market has witnessed gain in open interest by 7.77% to settled at while prices down -50 rupees, now Cocudakl is getting support at 2836 and below same could see a test of 2807 levels, and resistance is now likely to be seen at 2919, a move above could see prices testing 2973.

Trading Idea for the day

Cocudakl trading range for the day is 2807-2973.

Cocudakl dropped after update that 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.

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