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Cotton

Cotton yesterday settled down by -0.21% at 42150 on profit booking after USDA's planting intentions report showed U.S. cotton acreage at 12.234 million acres for the 2022/2023 marketing year versus 12.007 million acres forecasted. The USDA also released weekly export sales data which showed net sales of 234,000 running bales of cotton for 2021/2022, down 24% from the previous week. However downside seen limited on fears of shortfall in production and higher demand for raw cotton for export. The arrival of cotton in the country is continuously declining, at present the daily arrivals are 65 to 75 lakh bales which will further decrease in the coming week. At the moment, there are very few ginning mills running in the country, the stock of best quality cotton is very low at the moment, similarly the stock of Binola is also low. The price of cotton yarn is continuously increasing, but there is no major demand in the domestic market and export market, due to which the Spinners' Mills Association has cut production, due to which cotton industries will benefit in the long run. Spinning mills are buying cotton at higher prices as the balance sheet of cotton is becoming tighter continuously. In spot market, Cotton dropped by -120 Rupees to end at 43340 Rupees.Technically market is under long liquidation as market has witnessed drop in open interest by -1.64% to settled at 5524 while prices down -90 rupees, now Cotton is getting support at 41670 and below same could see a test of 41180 levels, and resistance is now likely to be seen at 42810, a move above could see prices testing 43460.

Trading Idea for the day

Cotton trading range for the day is 41180-43460.

Cotton dropped on profit booking after USDA's report showed U.S. cotton acreage at 12.234 million acres for the 2022/2023 versus 12.007 million acres forecasted

The USDA also released weekly export sales data which showed net sales of 234,000 running bales of cotton for 2021/2022, down 24% from the previous week

However downside seen limited on fears of shortfall in production and higher demand for raw cotton for export.

Cocudakl

Cocudakl yesterday settled up by 0.66% at 3196 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 gained by 29.25 Rupees to end at 3329.25 Rupees per 100 kgs.Technically market is under short covering as market has witnessed drop in open interest by -6.72% to settled at 73200 while prices up 21 rupees, now Cocudakl is getting support at 3158 and below same could see a test of 3119 levels, and resistance is now likely to be seen at 3223, a move above could see prices testing 3249.

Trading Idea for the day

Cocudakl trading range for the day is 3119-3249.

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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