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Cotton

Cotton yesterday settled up by 0.08% at 25790 as the cotton acreage in the country is likely to see a decline of about 15 per cent, with farmers shifting to oilseeds and pulses cultivation in several parts of the country. The cotton acreage last year stood at about 130 lakh hectares last year as against 134 lakh hectares in the previous year. Procurement may be required during the peak season when prices drop below the MSP, top officials of the corporation said. As against 92 lakh bales that was procured in the 2020-21 season, the CCI may not be required to procure more than 30 lakh bales for the new season, Pradeep Kumar Agarwal, CMD of the CCI, told. As per CCPC data, the 2020-21 season began with an opening stock of 120 lakh bales and the crop size was 371 lakh bales with 11 lakh bales of imports, leading to a total supply of 502 lakh bales. The new season may begin with an opening stock of 60-70 lakh bales. As the U.S. cotton crop moves into late summer, it continues to look like one of the better overall crops seen in several years. In spot market, Cotton gained by 30 Rupees to end at 27110 Rupees.Technically market is under short covering as market has witnessed drop in open interest by -10.97% to settled at 1835 while prices up 20 rupees, now Cotton is getting support at 25700 and below same could see a test of 25610 levels, and resistance is now likely to be seen at 25890, a move above could see prices testing 25990.

Trading Idea for the day

Cotton trading range for the day is 25610-25990.

Cotton prices remained supported as Cotton acreage to come down by 15%

Procurement may be required during the peak season when prices drop below the MSP, top officials of the corporation said.

As the U.S. cotton crop moves into late summer, it continues to look like one of the better overall crops seen in several years.

Cocudakl

Cocudakl yesterday settled down by -3.6% at 2976 on profit booking as cotton production will still be high because of good rains and may touch 350-360 lakh bales despite the area under coverage has gone down by 6-8%, from 133 lakh hectares last year to 125 lakh hectares in the current season, as kapas prices are likely to rule above the minimum support prices (MSP) for a better part of the season. However downside seen limited amid tight supply situation in cottonseed is expected to continue in the coming months considering the stronger demand. The Cotton Association of India (CAI), in its July estimate of the cotton crop for the season 2020-21 beginning October 1, 2020, has reduced the crop estimate by 1.50 lakh bales to 354.50 lakh bales from its previous estimate of 356 lakh bales (equivalent to 378.25 lakh running bales). The CAI has maintained its cotton crop estimate for the Northern Zone at the same level as in its previous month’s estimate i.e. at 65.50 lakh bales. "There is a reduction of 2.50 lakh bales in the crop estimate for Gujarat state, while the crop estimates of Maharashtra & Madhya Pradesh have been increased by 1.50 lakh bales and 0.50 lakh bales respectively compared to the estimates of these states made in the previous month," CAI said. In Akola spot market, Cocudakl dropped by -37.6 Rupees to end at 3117.65 Rupees per 100 kgs.Technically market is under fresh selling as market has witnessed gain in open interest by 4.89% to settled at 61760 while prices down -111 rupees, now Cocudakl is getting support at 2914 and below same could see a test of 2853 levels, and resistance is now likely to be seen at 3067, a move above could see prices testing 3159

Trading Idea for the day

Cocudakl trading range for the day is 2853-3159

Cocudakl dropped on profit booking as cotton production will still be high because of good rains and may touch 350-360 lakh bales.

CAI in its July estimate of the cotton crop for the season 2020-21, has reduced the crop estimate by 1.50 lakh bales to 354.50 lakh bales

The cotton crop estimate for the Central Zone has been reduced by 0.50 lakh bales to 193.50 lakh bales

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