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MCX COTTON

Cotton yesterday settled up by 0.19% at 21610 tracking rise in overseas prices on mill fixations and expectations supplies will remain tight as forecasts pointed to dry weather in West Texas, the largest U.S cotton-producing region. The U.S Department of Agriculture's (USDA) weekly crop progress report showed the cotton crop was 6% planted in the week ended April 4, 1% below the same week a year-ago. Cotton exports so far this season (October 2020 to September 2021), have clocked 47 lakh bales and are expected to touch 60-70 lakh bales by the end of the season. Supply of cottonseeds might become tight in the coming kharif season if farmers decide to expand the area under the fibre crop going by the high price that prevailed during the current season to September. India has raised the price of genetically modified cotton seeds by 5% for the fiscal year that began in March, a government order said, potentially boosting revenues of leading local seed makers. According to the order, the Ministry of Agriculture and Farmers' Welfare has raised the price of genetically modified cotton seeds to 767 rupees for a 450-gram packet, up from 730 rupees. In spot market, Cotton gained by 100 Rupees to end at 21880 Rupees. Technically market is under short covering as market has witnessed drop in open interest by -2.84% to settled at 7185 while prices up 40 rupees, now Cotton is getting support at 21320 and below same could see a test of 21030 levels, and resistance is now likely to be seen at 21820, a move above could see prices testing 22030.

Trading Idea for the day

* Cotton trading range for the day is 21030-22030.

* Cotton gained tracking rise in overseas prices on mill fixations and expectations supplies will remain tight as forecasts pointed to dry weather in West Texas.

* USDA weekly crop progress report showed the cotton crop was 6% planted in the week ended April 4, 1% below the same week a yearago.

* Cotton exports so far this season, have clocked 47 lakh bales and are expected to touch 60-70 lakh bales by the end of the season.

Cocudakl

Cocudakl yesterday settled up by 0.79% at 2558 on reports that cottonseed khali stock is empty in Gujarat. Supply of cottonseeds might become tight in the coming kharif season if farmers decide to expand the area under the fibre crop going by the high price that prevailed during the current season to September. Cottonseed production and quality were affected last year due to excessive rains in the key producing State of Telangana and some parts of Tamil Nadu. Due to continuous rains last year, there was lot of damage to seed production in Telangana and Tamil Nadu. In Telangana, the largest producer of cottonseeds, production dropped 20-25 per cent. As a result, there may be a tight supply situation this kharif season if the demand goes up. The industry expects the cotton acreage to be higher than the normal 12 million hectares as farmers may opt to plant more with prices of raw cotton ruling higher at ₹6,000 per quintal compared with the minimum support price of ₹5,515. Also, Telangana, already a major cotton producer, plans to bring in more area under the fibre crop. Placement of seeds has already started in Punjab, Haryana and Rajasthan, where the planting will begin from mid-April. There might not be any carryforward stocks at the end of kharif planting. In Akola spot market, Cocudakl gained by 21.3 Rupees to end at 2640.3 Rupees per 100 kgs. Technically market is under short covering as market has witnessed drop in open interest by -9.59% to settled at 38200 while prices up 20 rupees, now Cocudakl is getting support at 2531 and below same could see a test of 2503 levels, and resistance is now likely to be seen at 2595, a move above could see prices testing 2631.

Trading Idea for the day

* Cocudakl trading range for the day is 2503-2631.

* Cocudakl prices gained on reports that cottonseed khali stock is empty in Gujarat.

* Supply of cottonseeds might become tight in the coming kharif season if farmers decide to expand the area under the fibre crop

* Cottonseed production and quality were affected last year due to excessive rains in the key producing State of Telangana and some parts of Tamil Nadu.

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