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Cotton

Cotton yesterday settled down by -0.24% at 37960 amid renewed COVID-19 lockdowns in top consumer China weighed on sentiment. Financial hubs Shanghai and Shenzhen have been locked down as COVID-19 cases surge in China. Speculators cut their net long position in cotton futures by 4,844 contracts ending at 65,642 in the week to March 8, data from the Commodity Futures Trading Commission showed. on China's state planner said it had issued a 400,000 tonnes quota for cotton imports with a sliding tariff rate. The U.S. Department of Agriculture's weekly export sales report showed net sales rose 2% from the previous week and 51% from the prior four-week average. World cotton stocks were trimmed 1.74 MMT to 84.31 MMT, the lowest in a 3-Year due to a lighter production forecast from India, from January’s forecast of 85.01million 480- pound bales and 2020-21’s Ending Stock of 88.41million 480-pound bales. The world stocks-to-use was figured at 66.3%, compared to 67.7% last month. India cotton production has fallen for a third consecutive year and is estimated at 26.5 million 480-Pound Bales for the crop year 2021-22 versus USDA’s January 2022 estimate of 27.5 million 480-pound bales and 2020-21’s production of 27.6 480- pound bales. India cotton ending stocks will fall by -40.18% to a 3-Year low at 8.04 million 480-pound bales for 2021-22. In spot market, Cotton dropped by -60 Rupees to end at 37920 Rupees.Technically market is under long liquidation as market has witnessed drop in open interest by -6.01% to settled at 5672 while prices down -90 rupees, now Cotton is getting support at 37680 and below same could see a test of 37400 levels, and resistance is now likely to be seen at 38140, a move above could see prices testing 38320

Trading Idea for the day

Cotton trading range for the day is 37400-38320

Cotton fell amid renewed COVID-19 lockdowns in top consumer China weighed on sentiment.

Speculators cut their net long position in cotton futures by 4,844 contracts ending at 65,642 in the week to March 8.

China's state planner said it had issued a 400,000 tonnes quota for cotton imports with a sliding tariff rate

Cocudakl

Cocudakl yesterday settled down by -1.77% at 3099 on profit booking after 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 (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 - 22.25 Rupees to end at 3258.6 Rupees per 100 kgs.Technically market is under fresh selling as market has witnessed gain in open interest by 1.52% to settled at 104770 while prices down -56 rupees, now Cocudakl is getting support at 3068 and below same could see a test of 3036 levels, and resistance is now likely to be seen at 3148, a move above could see prices testing 3196

Trading Idea for the day

Cocudakl trading range for the day is 3036-3196.

Cocudakl dropped on profit booking after 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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