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Cotton

Cotton yesterday settled down by -2.17% at 32050 as worries of an imminent recession dampened demand for the natural fiber crop. However crops remain threatened due to adverse weather conditions and pest attacks in major growing regions. Cotton output is expected to rebound from last years’ experience of unseasonal rain affecting the crop. Production this year is seen at 341.9 lakh bales (170 kg) against 312.03 lakh bales last year. Pakistan’s cotton production has shrunk 19% to 2.19 million bales till September 15, 2022 in the current season mainly due to the devastation caused by heavy rainfall and flash floods nationwide. In Gujarat, new cotton arrival increased, and daily arrival reached 6,000 bales of 170 kg. Ginning mills have started buying seed cotton with the advent of the auspicious festival of Navratri. However, spinning mills are cautious as they expect a downward trend in cotton prices during peak arrival. In its monthly supply-demand report, the 2022/23 U.S. cotton projections include higher beginning stocks, production, exports and ending stocks this month, the USDA's report said. Additionally, the 2022/23 world cotton projections include higher production and ending stocks relative to last month, and lower consumption. In recent time, the heavy rainfalls and pest attacks are affecting the cotton crop. In the northern states of Punjab, Haryana, and Rajasthan cotton crop has been affected due to pink bollworm infestation. In spot market, Cotton dropped by -150 Rupees to end at 33250 Rupees.Technically market is under long liquidation as the market has witnessed a drop in open interest by -1.31% to settle at 751 while prices are down -710 rupees, now Cotton is getting support at 31720 and below same could see a test of 31390 levels, and resistance is now likely to be seen at 32590, a move above could see prices testing 33130.

Trading Idea for the day

Cotton trading range for the day is 31390-33130.

Cotton prices dropped as worries of an imminent recession dampened demand for the natural fiber crop.

In Gujarat, new cotton arrival increased, and daily arrival reached 6,000 bales of 170 kg

Spinning mills are cautious as they expect a downward trend in cotton prices during peak arrival.

Cocudakl

Cocudakl yesterday settled up by 2.42% at 2373 on lowl evel buying after prices dropped due to surging selling pressure at physical market. Stockiest are offloading their stocks in wake of bumper production outlook of cotton. Reports of rising area under cotton and increased availability of green fodder kept cotton seed oil cake prices down. However some support seen last week as available stock is estimated to be very limited, the quality of which is also very weak. Support also seen after reports that there is a forecast of damage due to heavy rains after sowing of cotton in Vidarbha and Khandesh parts of Maharashtra. Sporadic arrivals of new cotton have already started in Haryana and Punjab, while the arrival of new cotton will start in Khandesh at the end of August and in Madhya Pradesh in September. All India Mandi arrivals of Kapas fell by around 82% on M-o-M basis; they were also lower by around 19% on Y-o-Y basis. Gujarat is a major producer of cotton across the country and reports of increase in sowing of cotton by at least 20% in Gujarat are coming. As per CAI, total cotton supply till end of the cotton season 2021-22 is estimated at 402.16 lakh bales of 170 kg each, lower by around 18% as compared to 488 lakh bales last year. Cocudakl’s stock in NCDEX warehouse reduced from 21 lakh sacks to 7.50 lakh sacks. 60 to 70% of Cocudakl’s stock in Gujarat is estimated to be weak quality stock. In Akola spot market, Cocudakl gained by 1.95 Rupees to end at 2697.25 Rupees per 100 kgs.Technically market is under fresh buying as the market has witnessed a gain in open interest by 3.02% to settle at 33080 while prices are up 56 rupees, now Cocudakl is getting support at 2331 and below same could see a test of 2288 levels, and resistance is now likely to be seen at 2408, a move above could see prices testing 2442.

Trading Idea for the day

Cocudakl trading range for the day is 2288-2442

Cocudakl gained on low level buying after prices dropped due to surging selling pressure at physical market.

Some support seen last week as available stock is estimated to be very limited, the quality of which is also very weak.

Farmers in Pakistan stranded by unprecedented floods are running low on feed for their cattle.

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