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COTTON

Cotton yesterday settled up by 2.05% at 32910 bolstered by strong demand from both the domestic textile sector and export markets over the last year, and high global prices. China will start a new round of sales from its cotton reserves, with a total 600,000 tonnes of imported and domestic cotton to be sold off in daily auctions, according to an official notice. It is the second batch of cotton to be released from reserves this year and is designed to better meet demand for the fibre from spinning companiesBoth production estimates for the 2021/22 crop year and ending stocks in the U.S. were largely unchanged at 18.20 million bales and 3.40 million bales respectively, the USDA said in its November World Agricultural Supply and Demand Estimates (WASDE) report. "The global cotton balance sheet for 2021/22 includes higher production and consumption, and slightly lower ending stocks," the USDA said. India’s cotton production in 2021-22 season is likely to be 360.13 lakh bales of 170 kg each (equivalent to 382.64 lakh running bales of 160 kg each), which is more by 7.13 lakh bales than the previous season’s crop of 353 lakh bales, the Cotton Association of India (CAI) has said in its first estimate for the new season beginning October 1, 2021. In spot market, Cotton gained by 160 Rupees to end at 32420 Rupees.Technically market is under fresh buying as market has witnessed gain in open interest by 0.81% to settled at 3253 while prices up 660 rupees, now Cotton is getting support at 32540 and below same could see a test of 32160 levels, and resistance is now likely to be seen at 33160, a move above could see prices testing 33400.

Technical Chart

Trading Range

Cotton trading range for the day is 32160-33400.

Cotton gained bolstered by strong demand from both the domestic textile sector and export markets over the last year, and high global prices.

China starts new round of cotton sales to boost supply

Both production estimates for the 2021/22 crop year and ending stocks were largely unchanged at 18.20 million bales and 3.40 million bales respectively

COCUDAKL

Cocudakl yesterday settled up by 1.08% at 2527 amid tight supply situation in cottonseed is expected to continue in the coming months considering the stronger demand. However upside seen limited as crop seems to be in good condition after Gujarat received very good rainfall. Cotton production will still be high because of good rains and may touch 350-360 lakh bales despite the area under coverage has gone down by 6-8%, from 133 lakh hectares last year to 125 lakh hectares in the current season. The U.S. Department of Agriculture forecast lower production and also cut ending stocks estimates for the 2021/22 marketing year in a monthly report. In its WASDE report, the USDA projected lower U.S. production, exports and ending stocks compared with July, as well as lower world 2021/22 ending stocks. CAI in its July estimate of the cotton crop for the season 2020-21 beginning October 1, 2020, has reduced the crop estimate by 1.50 lakh bales to 354.50 lakh bales from its previous estimate of 356 lakh bales. The CAI has maintained its cotton crop estimate for the Northern Zone at the same level as in its previous month’s estimate i.e. at 65.50 lakh bales. In Akola spot market, Cocudakl dropped by -42.2 Rupees to end at 2600 Rupees per 100 kgs.Technically market is under fresh buying as market has witnessed gain in open interest by 1.56% to settled at 31260 while prices up 27 rupees, now Cocudakl is getting support at 2494 and below same could see a test of 2461 levels, and resistance is now likely to be seen at 2554, a move above could see prices testing 2581.

Technical Chart

Trading Range

Cocudakl trading range for the day is 2461-2581.

Cocudakl gained amid tight supply situation in cottonseed is expected to continue in the coming months considering the stronger demand.

However upside seen limited as crop seems to be in good condition after Gujarat received very good rainfall.

The cotton crop estimate for the Central Zone has been reduced by 0.50 lakh bales to 193.50 lakh bales

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