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Cotton

Cotton yesterday settled up by 2.83% at 40320 amid strong demand and possible lower supplies. USDA’s weekly export sales data showed that cotton shipments reached 96% of the USDA’s marketing year estimates to 371,400 bales, which is also 5% more than that of the previous week and 34% higher from the prior 4-week average. At the same time, concerns grew over the drought conditions in West Texas on the back of lower than normal precipitation forecasts for the area. Also, USDA in its March 10th report estimated 2021/22 global cotton consumption to be 111,000 bales higher compared to last month’s projections while it sees world ending stocks 1.7 million bales lower due to smaller global production, particularly from India. Cotton production at 340.63 lakh bales for this season (October 2021-September 2022) against 352.48 lakh bales last season, as per second advance estimate, the Union Ministry for Agriculture and Farmers WelfareLast month, the Cotton Association of India (CAI), a body of traders, cut its crop estimates to 343.13 lakh bales from its earlier projection of 348.13 lakh bales. Speculators reduced their net long position in cotton futures on ICE U.S. in the week to March 15, data from the Commodity Futures Trading Commission (CFTC) showed. In spot market, Cotton gained by 1390 Rupees to end at 39450 Rupees.Technically market is under short covering as market has witnessed drop in open interest by -18.22% to settled at 3994 while prices up 1110 rupees, now Cotton is getting support at 39740 and below same could see a test of 39150 levels, and resistance is now likely to be seen at 40660, a move above could see prices testing 40990.

Trading Idea for the day

Cotton trading range for the day is 39150-40990.

Cotton rose amid strong demand and possible lower supplies

USDA’s weekly export sales data showed that cotton shipments reached 96% of the USDA’s marketing year estimates to 371,400 bales

Speculators reduced their net long position in cotton futures

Cocudakl

Cocudakl yesterday settled up by 1.37% at 3172 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 38.85 Rupees to end at 3292.85 Rupees per 100 kgs.Technically market is under short covering as market has witnessed drop in open interest by -4.34% to settled at 100660 while prices up 43 rupees, now Cocudakl is getting support at 3151 and below same could see a test of 3129 levels, and resistance is now likely to be seen at 3187, a move above could see prices testing 3201.

Trading Idea for the day

Cocudakl trading range for the day is 3129-3201.

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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