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Cotton

Cotton yesterday settled down by -1.51% at 37900 on 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 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). 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 supply-demand 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. "The U.S. export forecast is lowered by 250,000 bales to 14.75 million based on lagging shipments due to logistical issues," the USDA said. In spot market, Cotton gained by 490 Rupees to end at 38120 Rupees.Technically market is under long liquidation as market has witnessed drop in open interest by -0.85% to settled at 6082 while prices down -580 rupees, now Cotton is getting support at 37570 and below same could see a test of 37240 levels, and resistance is now likely to be seen at 38430, a move above could see prices testing 38960.

Trading Idea for the day

Cotton trading range for the day is 37240-38960

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

Cotton supply from the world’s largest producer is poised for a rebound

Global cotton consumption is expected to rise 2.8% this year

Cocudakl

Cocudakl yesterday settled up by 0.37% at 3273 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 gained by 29 Rupees to end at 3319.5 Rupees per 100 kgs.Technically market is under fresh buying as market has witnessed gain in open interest by 13.38% to settled at while prices up 12 rupees, now Cocudakl is getting support at 3239 and below same could see a test of 3204 levels, and resistance is now likely to be seen at 3312, a move above could see prices testing 3350.

Trading Idea for the day

Cocudakl trading range for the day is 3204-3350

Cocudakl prices gained as support seen amid improved demand for raw cotton in the market

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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