Cocudakl trading range for the day is 3038-3194 - Kedia Advisory
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COTTON
Cotton yesterday settled up by 0.48% at 27040 as the yield per hectare of Indian cotton has dropped below 500 kg per hectare despite a rise in the area under the fibre crop. Data from the Committee on Cotton Production and Consumption (CCPC), a body comprising representatives from growers, traders, mills, exporters and government, show that while the area under cotton has topped 130 lakh hectares (lh) since 2019, the yield per hectare dropped below 500 kg, four times out of the last six years.
According to the CCPC, cotton closing stocks, last season were 120.95 lakh bales, and for the current season, they have been estimated at 97.95. Industry and trader experts feel the closing stocks this season could be lower than CCPC’s estimates. CCPC data show that Maharashtra has the highest area under cotton at 41.84 lh, but its yield is the lowest among all States below 350 kg.
Only Gujarat has shown a rise in acreage over the last three years, but this is attributed to the cultivation of an unauthorised Bt (Bacillus thuringiensis) variety. Prices seen supported amid expectations of lower supply and increased demand from the textile industry as countries continue re-opening efforts. In spot market, Cotton gained by 80 Rupees to end at 27320 Rupees.
Technically market is under short covering as market has witnessed drop in open interest by -0.77% to settled at 5444 while prices up 130 rupees, now Cotton is getting support at 26930 and below same could see a test of 26830 levels, and resistance is now likely to be seen at 27140, a move above could see prices testing 27250.
Trading Idea for the day
Cotton trading range for the day is 26830-27250.
Cotton prices gained as support seen cotton yield drops below 500 kg per hectare in India despite a rise in area
Prices seen supported amid expectations of lower supply and increased demand from the textile industry
World cotton stocks are projected at 89.3 million bales at the end of 2021/22, the lowest in three years.
COCUDAKL
Cocudakl yesterday settled up by 0.39% at 3100 as the tight supply situation in cottonseed is expected to continue in the coming months considering the stronger demand. In Rajasthan, Cotton sowing is done in 596.7 thousand hectares as compared to last year’s 673.7 thousand hectares i.e down by -11.4% while for the current year the targeted area of sowing is 780 thousand hectares.
Support seen as falling arrival numbers of raw cotton due to the lean supply season and thin stocks lying with ginners and farmers. The CAI has kept its consumption estimate for the current crop year at 330 lakh bale in the previous month. The new season for cotton will start only in October. The probability of consumption of cotton cake shifting towards mixing in the animal feed rations has increased this year because of soy meal turning quite expensive over previous years.
The all India sowing area of cotton had reached 86.45 lakh hectares. The acreage was 104.83 lakh hectares during the corresponding period of last year. Sowing will increase in coming weeks subject to improvement in the rainfall intensity in states of Gujarat/ Maharashtra/ Karnataka, Andhra Pradesh and Telangana. In Akola spot market, Cocudakl gained by 15.95 Rupees to end at 3100 Rupees per 100 kgs.
Technically market is under short covering as market has witnessed drop in open interest by -5.81% to settled at 37590 while prices up 12 rupees, now Cocudakl is getting support at 3069 and below same could see a test of 3038 levels, and resistance is now likely to be seen at 3147, a move above could see prices testing 3194.
Trading Idea for the day
Cocudakl trading range for the day is 3038-3194.
Cocudakl gained as the tight supply situation in cottonseed is expected to continue in the coming months considering the stronger demand.
In Rajasthan, Cotton sowing is done in 596.7 thousand hectares down by -11.4%.
Support seen as falling arrival numbers of raw cotton due to the lean supply season and thin stocks lying with ginners and farmers.
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