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Cotton

Cotton yesterday settled up by 2.08% at 44190 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. Meanwhile, CAI, cut cotton production forecast for the country by 8 lakh bales in Apr to 335.18 lakh bales compared to 343 lakh bales pegged in Feb. In the second advance estimates, govt has cut cotton production to 340 lakh bales from 362 lakh bales in 1st estimate. 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. In spot market, Cotton gained by 490 Rupees to end at 44090 Rupees.Technically market is under short covering as market has witnessed drop in open interest by -2.21% to settled at 4834 while prices up 900 rupees, now Cotton is getting support at 43680 and below same could see a test of 43180 levels, and resistance is now likely to be seen at 44490, a move above could see prices testing 44800.

Trading Idea for the day

Cotton trading range for the day is 43180-44800

Cotton prices gains 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

The USDA increase global cotton production forecast in 2021-22 to 120.2 million bales, compared to 119.9 million bales in Feb 2022.

Cocudakl

Cocudakl yesterday settled up by 0.76% at 3059 on fears of a shortfall in production and higher demand for export. 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. The USDA in its monthly report has cut India's cotton production to 27.5 million bales from 28 million bales last month, while the US, the largest exporter, cut cotton production by 3.61% to 17.6 million bales. As per estimate, cotton production in Gujarat is expected to be lower in 2021-22 season because of lesser sown area around 22.53 lakh hectares as compared to 25.53 lakh hectares in the previous season. Support also seen amid expectations of firm demand, particularly from China and tight supplies. An urgency in obtaining the supplies and a buyout of cotton futures by hedge funds also supported the cotton market. In Akola spot market, Cocudakl dropped by -4.35 Rupees to end at 3246.65 Rupees per 100 kgs.Technically market is under fresh buying as market has witnessed gain in open interest by 4.59% to settled at 130650 while prices up 23 rupees, now Cocudakl is getting support at 3018 and below same could see a test of 2977 levels, and resistance is now likely to be seen at 3092, a move above could see prices testing 3125.

Trading Idea for the day

Cocudakl trading range for the day is 2977-3125.

Cocudakl prices seen supported on fears of a shortfall in production and higher demand for export.

CAI in its latest report has reduced its cotton production by 5.00 lakh bales to 343.13 lakh bales for 2021-22.

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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