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Cotton

Cotton yesterday settled down by -0.94% at 44240 on profit booking as 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. However downside seen limited 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. 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 gained by 310 Rupees to end at 45280 Rupees.Technically market is under fresh selling as market has witnessed gain in open interest by 16.93% to settled at 2935 while prices down -420 rupees, now Cotton is getting support at 43920 and below same could see a test of 43610 levels, and resistance is now likely to be seen at 44600, a move above could see prices testing 44970.

Trading Idea for the day

Cotton trading range for the day is 43610-44970

Cotton dropped on profit booking as the Telangana government is targeting to increase the area under cotton by 55–65 per cent to about 28–30 lakh hectares

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.

Cocudakl

Cocudakl yesterday settled down by -1.97% at 2883 as 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. Traders also remained worried over cotton crops, as roughly 57% of the lower 48 states remained under drought conditions, according to government data. CAI in its latest report has reduced its cotton production by 5.00 lakh bales to 343.13 lakh bales (1 bale of 170 kg) for 2021-22. Consumption also declined by 5 lakh bales to 340 lakh bales, while export and import figures remain unchanged at 15-45 lakh bales respectively. The government has estimated the production of cotton under the second advance estimate for the year 2021-22 at 340 lakh bales as against 362 lakh bales in the first estimate. In Akola spot market, Cocudakl dropped by -22.55 Rupees to end at 3189.65 Rupees per 100 kgs.Technically market is under fresh selling as market has witnessed gain in open interest by 0.22% to settled at while prices down -58 rupees, now Cocudakl is getting support at 2857 and below same could see a test of 2831 levels, and resistance is now likely to be seen at 2927, a move above could see prices testing 2971.

Trading Idea for the day

Cocudakl trading range for the day is 2831-2971.

Cocudakl droppedas 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 also seen amid expectations of higher supply from the US and lower global demand.

The USDA in its monthly report has cut India's cotton production to 27.5 million bales from 28 million bales last month

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