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Cotton

Cotton yesterday settled remain unchangeby 0% at 25190 as India’s cotton ending stocks could be lower than 75 lakh bales (170 kg each) in the current season to September as domestic demand has picked up. But some estimates are pegging them higher than 100 lakh bales against a record 120-plus lakh bales last season.

CCI, which had nearly 207 lakh bales of cotton stocks, could be left with 18 lakh bales by the end of the season, the CMD said, adding that most of the sales were meant for domestic consumption. Some trade experts expect mills’ consumption to top 300 lakh bales, though Southern India Mills Association (SIMA) Secretary-General K Selvaraju said the shutdown due to Covid pandemic could lower the offtake below CCPC projections.

The Cotton Association of India (CAI), the apex body of cotton traders, pegged domestic consumption at 325 lakh bales at its meeting last month, with mills’ demand pegged at 282 lakh bales. The other reason for lower ending stocks this season is export demand. Currently, 67 lakh bales of cotton have been exported. CCI said cotton exports would exceed 70 lakh bales and the current shipments were competitive globally. In spot market, Cotton dropped by -30 Rupees to end at 25250 Rupees.

Technically market is under long liquidation as market has witnessed drop in open interest by -4.98% to settled at 4556 while prices remain unchanged 0 rupees, now Cotton is getting support at 25140 and below same could see a test of 25080 levels, and resistance is now likely to be seen at 25250, a move above could see prices testing 25300.

Trading Idea for the day

Cotton trading range for the day is 25080-25300.

Cotton prices steadied as India’s cotton ending stocks could be lower than 75 lakh bales in the current season as domestic demand has picked up.

CCI said cotton exports would exceed 70 lakh bales and the current shipments were competitive globally.

CAI pegged domestic consumption at 325 lakh bales at its meeting last month, with mills’ demand pegged at 282 lakh bales.

Cocudakl

Cocudakl yesterday settled down by -1.28% at 2863 on profit booking after prices gained as there is a possibility of damage to the crops which have been sown due to less rain for the next several days. The tight supply situation in cottonseed is expected to continue in the coming months considering the stronger demand.

Support seen as falling arrival numbers of raw cotton due to the lean supply season and thin stocks lying with ginners and farmers has resulted in supply crunch in the market. The demand and supply balance sheet for cotton is indicative of prices to remain firm in coming months.

The USDA in its latest report has pegged global ending stocks in 2021/22 down 1.7 million bales to 89.3 million versus 2020/21. Global consumption estimate for is also higher for 2021/22, up 1.1 million bales year on year. World trade on the other hand is estimated 1.1 million bales higher, considering better import possibilities from China, Bangladesh, and Turkey.

The industry remains optimistic demand for Indian cotton products to improve in near term from the global economic rebound. The CAI has kept its consumption estimate for the current crop year at 330 lakh bale in the previous month. In Akola spot market, Cocudakl dropped by -10.8 Rupees to end at 2902.75 Rupees per 100 kgs.

Technically market is under fresh selling as market has witnessed gain in open interest by 2.9% to settled at 56390 while prices down -37 rupees, now Cocudakl is getting support at 2838 and below same could see a test of 2812 levels, and resistance is now likely to be seen at 2905, a move above could see prices testing 2946.

Trading Idea for the day

Cocudakl trading range for the day is 2812-2946.

Cocudakl dropped on profit booking after prices gained as the tight supply situation in cottonseed is expected to continue

Support seen as falling arrival numbers of raw cotton due to the lean supply season and thin stocks resulted in supply crunch in the market.

Support seen amid falling arrival numbers of raw cotton due to the lean supply season and thin stocks.

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