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Cotton

Cotton yesterday settled down by -1.94% at 36990 as production of Cotton is estimated at 34.06 million bales (each of 170 kg) is higher by 1.12 million bales than the average cotton production of 32.95 million bales, as per 2nd Advance Estimates for 2021-22. There were reports U.S. cotton plantings are expected to climb amid strong foreign demand, higher input costs for farmers and prolonged drought in Texas, the crop’s top growing state. U.S. farmers are projected to sow 12 million acres for the season beginning Aug. 1, up about 7.3% from the previous year, according to the National Cotton Council’s planting-intentions survey showed. Global cotton consumption is expected to rise 2.8% this year, according to data from the United States Department of Agriculture. The U.S. Department of Agriculture (USDA) raised the estimate for U.S. stocks at the end of its 2021/22 crop year and projected a decline in the country's exports in its monthly supplydemand report. In its February World Agriculture Supply and Demand Estimates (WASDE) report, the USDA raised U.S. ending stocks estimates by 300,000 bales to 3.50 million bales, while U.S. production estimates were unchanged at 17.62 million bales. However low cotton yield this season due to excessive rain and pink bollworm attack has resulted in the crop selling at over 60 per cent higher than the MSP. In spot market, Cotton dropped by -220 Rupees to end at 37510 Rupees.Technically market is under long liquidation as market has witnessed drop in open interest by -27.39% to settled at 3366 while prices down -730 rupees, now Cotton is getting support at 36420 and below same could see a test of 35860 levels, and resistance is now likely to be seen at 37680, a move above could see prices testing 38380.

Trading Idea for the day

Cotton trading range for the day is 35860-38380.

Cotton dropped as production of Cotton is estimated at 34.06 mln bales is higher by 1.12 mln bales than the average cotton production of 32.95 mln bales

However downside seen limited amid low cotton yield this season due to excessive rain and pink bollworm attack

U.S. cotton plantings are expected to climb amid strong foreign demand, higher input costs for farmers and prolonged drought in Texas

Cocudakl

Cocudakl yesterday settled down by -2% at 3183 on profit booking tracking weakness in cotton after prices seen supported amid improved demand for raw cotton in the market mainly from spinning and ginning mills. 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. Meanwhile, farmers in top producer India held on to production as heavy rains hit the quality of crop. Elsewhere, USDA in its latest report estimated 2021/22 global production to drop by 608,000 bales as lower production in the US and India offset increases for China, Australia and Pakistan. The 2021/22 global consumption forecast is virtually unchanged as a 500,000- bale decline in China’s cotton use is offset by gains for India, Mexico, and Pakistan. Global ending stocks for 2021/22 are down 726,000 bales this month. Dairy prices rose at the global auction, surpassing their March peak to touch a fresh seven-year high, as tight milk supply underpins demand for New Zealand’s biggest export commodity. In Akola spot market, Cocudakl dropped by -10.85 Rupees to end at 3300 Rupees per 100 kgs.Technically market is under long liquidation as market has witnessed drop in open interest by -0.82% to settled at while prices down -65 rupees, now Cocudakl is getting support at 3150 and below same could see a test of 3117 levels, and resistance is now likely to be seen at 3239, a move above could see prices testing 3295

Trading Idea for the day

Cocudakl trading range for the day is 3117-3295

Cocudakl dropped on profit booking tracking weakness in cotton after prices seen supported amid improved demand for raw cotton inmainly from spinning mills.

Farmers in top producer India held on to production as heavy rains hit the quality of crop

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.

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