IGI Logo

MCX COTTON

Cotton yesterday settled up by 0.84% at 37030 amid the 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 minimum support price (MSP). An official of the Cotton Corporation of India (CCI), said unseasonal rains in September last year followed by pink bollworm attack had not only hit the yield, but also affected the crop’s quality. Overseas demand for cotton candy or ginned cotton and cotton yarn is robust, contributing to an all-time high price for the commodity. In the current season, cotton acreage in the Gujarat stood at 22.53 lakh hectare in the kharif season 2021-22 as against 22.78 lakh hectares in the previous season, with an average of 25.53 lakh hectares recorded over the previous three years. As per the Gujarat government’s First Advanced Estimate (FAE), cotton production in Gujarat at 80.95 lakh bales, each containing 170 kg of seed-cotton, is almost as normal as last year’s. Higher demand and lower output could bring down stockpiles at the end of the current season to 4.5 million bales from 7.5 million bales a year ago, Atul Ganatra, president of the CAI, said. In spot market, Cotton gained by 220 Rupees to end at 36550 Rupees.Technically market is under fresh buying as market has witnessed gain in open interest by 3.27% to settled at 6673 while prices up 310 rupees, now Cotton is getting support at 36750 and below same could see a test of 36460 levels, and resistance is now likely to be seen at 37220, a move above could see prices testing 37400.

Trading Idea for the day

Cotton trading range for the day is 36460-37400.

Cotton prices gained amid the low cotton yield this season due to excessive rain and pink bollworm attack

Unseasonal rains in September last year followed by pink bollworm attack had not only hit the yield, but also affected the crop’s quality

Overseas demand for cotton candy or ginned cotton and cotton yarn is robust, contributing to an all-time high price for the commodity.

NCDEX COCUDAKL

Cocudakl yesterday settled down by -0.18% at 3255 on profit booking after prices gained tracking rise in cotton prices due to the demand in the international market and low yields this season. However, upside seen limited as the chances of re-emergence of the Covid through the Omicron variant is said to be having a global impact. 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. The Global Dairy Trade price index increased 1.4 per cent at the latest auction, to touch its highest level since March 2014. In Akola spot market, Cocudakl gained by 42.2 Rupees to end at 3332.65 Rupees per 100 kgs.Technically market is under long liquidation as market has witnessed drop in open interest by -11.7% to settled at 63770 while prices down -6 rupees, now Cocudakl is getting support at 3191 and below same could see a test of 3128 levels, and resistance is now likely to be seen at 3310, a move above could see prices testing 3366

Trading Idea for the day

Cocudakl trading range for the day is 3128-3366

Cocudakl dropped on profit booking after prices gained tracking rise in cotton prices due to the demand in the international market and low yields this season.

Support also seen amid expectations of firm demand, particularly from China and tight supplies.

However, upside seen limited as the chances of re-emergence of the Covid through the Omicron variant is said to be having a global impact.

To Read Complete Report & Disclaimer Click Here

Views express by all participants are for information & academic purpose only. Kindly read disclaimer before referring below views. Click Here For Disclaimer