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Cotton

Cotton yesterday settled up by 2.25% at 41870 amid depleting stock in international markets due to rains, cultivation of cotton in lesser area and inferior quality of the produce in other markets. The Committee on Cotton Production and Consumption has estimated the current cotton season (October 2021 to September 2022) to close with a stock of 45.46 lakh bales. The Committee estimated the total consumption by textile mills to be 329 lakh bales, including 305 lakh bales by non-SSI mills, and exports at 40 lakh bales. The production is expected to be about 340 lakh bales. As against a total supply of 430.46 lakh bales (including opening stock and imports), the demand is likely to be 385 lakh bales. The Haryana agriculture department has set a target of increasing area under cotton production up to 19.25 lakh acre in the 2022 Kharif season even though during the previous season, cotton was grown on 15.90 lakh acre. Atul Ganatra, president of Cotton Association of India said that demand in local mills is good and new spinning mills are coming up. Demand is good but the profit that spinning mills were earnings has been reduced and now they will be at par or there will be a loss to the spinning mills at a high rate of cotton. In spot market, Cotton gained by 460 Rupees to end at 40980 Rupees.Technically market is under fresh buying as market has witnessed gain in open interest by 5.67% to settled at 5908 while prices up 920 rupees, now Cotton is getting support at 41300 and below same could see a test of 40720 levels, and resistance is now likely to be seen at 42180, a move above could see prices testing 42480.

Trading Idea for the day

Cotton trading range for the day is 40720-42480.

Cotton prices rose amid depleting stock in international markets due to rains, cultivation of cotton in lesser area and inferior quality

The Committee on Cotton Production and Consumption has estimated the current cotton to close with a stock of 45.46 lakh bales

The Haryana agriculture department has set a target of increasing area under cotton production up to 19.25 lakh acre

Cocudakl

Cocudakl yesterday settled up by 0.12% at 3290 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 dropped by -4.35 Rupees to end at 3352.5 Rupees per 100 kgs.Technically market is under short covering as market has witnessed drop in open interest by -0.91% to settled at 92360 while prices up 4 rupees, now Cocudakl is getting support at 3268 and below same could see a test of 3245 levels, and resistance is now likely to be seen at 3320, a move above could see prices testing 3349

Trading Idea for the day

Cocudakl trading range for the day is 3245-3349

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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