IGI Logo

MCX COTTON

Cotton yesterday settled down by -0.7% at 21260 after reports the federal cabinet rejected an Economic Coordination Committee (ECC) proposal to import cotton from India. The rejection comes a day after the ECC gave a goahead to the import of cotton, cotton yarn and sugar from the neighbooring country. Cotton rose after Pakistan lifted a nearly two-year ban on cotton imports from arch-rival India, the finance minister said. Support also seen after U.S. Department of Agriculture estimates all cotton planted area for 2021 at 12.0 million acres, down less than 1 percent from last year. The government has increased prices of BG2 cotton seeds by 5%. In a notification issued, the government has stated that the prices of BG2 cotton have been fixed at Rs 767 for a 450-gm packet — a 5% rise from the previous year’s price of Rs 730 for the same. “This is less than the 10% rise we requested for, but we consider it as a good gesture by the government. The association has represented to the government that the cotton seed business is becoming unviable for the industry, and research investments in developing new hybrids have dwindled significantly. If this is not corrected immediately, it will adversely affect cotton yields and farmers’ profitability,” Ram Kaundinya, director general, Federation of Seed Industry of India (FSI) and Alliance for Agri Innovation, said. In spot market, Cotton dropped by -10 Rupees to end at 21690 Rupees. Technically market is under long liquidation as market has witnessed drop in open interest by -1.48% to settled at 7660 while prices down -150 rupees, now Cotton is getting support at 21080 and below same could see a test of 20910 levels, and resistance is now likely to be seen at 21540, a move above could see prices testing 21830.

Trading Idea for the day

* Cotton trading range for the day is 20910-21830.

* Cotton prices dropped paring gains after reports Cabinet rejects ECC proposal to import cotton from India

* USDA estimates all cotton planted area for 2021 at 12.0 million acres, down less than 1 percent from last year.

* Govt hikes BG2 cotton seed price by 5%

NCDEX COCUDAKL

Cocudakl yesterday settled up by 3.81% at 2479 due to demand from animal feeders and weak supply. Considering the rise in binola and supply, the possibility of a fall in the coming days may be less market compelling. Export prospects remain better for Indian cotton and domestic demand continues improving post lock down phase. However upside seen limited as the market is getting cotton supplies from the Cotton Corporation of India. As compared with cotton seed, the oil cake (cotton oil cake) prices have seen limited upside, since this commodity cannot be stored for a longer period, hence the stockists and traders generally prefer to sell without much price hikes, or even at discounts, whenever buying interest reduces. The USDA’s last month’s release conveyed lowering of India’s Cotton production estimate by 500,000 bales after considering the rising instances of pest infestation. Pakistan’s production is estimated lower by 200,000 bales higher while Australia’s production may be 100,000 bales higher. World consumption is projected 1.5 million bales higher versus previous estimate with China’s forecast being 1.0 million bales higher, reflecting growing domestic textile demand and exports. There are optimistic views hopes that demand for cotton products in near term shall be robust from the global economic rebound amid concerns over chances of a significant reduction in the ending inventory. In Akola spot market, Cocudakl gained by 49.45 Rupees to end at 2511.75 Rupees per 100 kgs. Technically market is under short covering as market has witnessed drop in open interest by -24.48% to settled at 60720 while prices up 91 rupees, now Cocudakl is getting support at 2415 and below same could see a test of 2352 levels, and resistance is now likely to be seen at 2512, a move above could see prices testing 2546.

Trading Idea for the day

* Cocudakl trading range for the day is 2352-2546.

* Cocudakl prices remained supported due to demand from animal feeders and weak supply.

* Considering the rise in binola and supply, the possibility of a fall in the coming days may be less market compelling.

* Export prospects remain better for Indian cotton and domestic demand continues improving post lock down phase.

To Read Complete Report & Disclaimer Click Here

Views express by all participants are for information & academic purpose only. Kindly read disclaimer before referring below views. Click Here For Disclaimer