Cotton trading range for the day is 21360-22120 - Kedia Advisory
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COTTON
Cotton yesterday settled down by -0.32% at 21810 as pressure seen after the Government of India’s top cotton crop assessment body has projected cotton consumption to dip by a little more than 8 per cent owing to the latest Covid-19 wave and the subsequent lockdowns in several States. The Union Ministry of Textiles’ Committee on Cotton Production and Consumption (COCPC) has reduced cotton consumption for season 2020-21 (October to September period) from 330 lakh bales (each of 170 kg) to 303 lakh bales, primarily due to the current lockdowns as the severe second wave of Covid has gripped the entire nation. In the COCPC meeting held on April 30, the estimated cotton closing stock has been increased from the earlier projected 98.79 lakh bales to 118.79 lakh bales at the end of the season on September 30, 2021. The COCPC, which was formed in September 2020 replacing the erstwhile Cotton Advisory Board (CAB), has also curtailed the projected cotton output for the season from the earlier estimated 371 lakh bales to 360 lakh bales. China's National Development and Reform Commission (NDRC) said it had issued an additional 700,000 tonnes quota for cotton imports this year, all of which is for non-state traders and will be subject to a sliding scale tariffs system. In spot market, Cotton gained by 10 Rupees to end at 22000 Rupees.Technically market is under fresh selling as market has witnessed gain in open interest by 0.62% to settled at 8725 while prices down -70 rupees, now Cotton is getting support at 21580 and below same could see a test of 21360 levels, and resistance is now likely to be seen at 21960, a move above could see prices testing 22120.
Trading Idea for the day
Cotton trading range for the day is 21360-22120
Cotton prices dropped as pressure seen after COCPC projects season 2020-21 consumption at 303 lakh bales, down from 330 lakh bales
The estimated cotton closing stock has been increased from the earlier projected 98.79 lakh bales to 118.79 lakh bales
China's National Development and Reform Commission (NDRC) said it had issued an additional 700,000 tonnes quota for cotton imports this year
Cocudakl
Cocudakl yesterday settled down by -3.73% at 2428 amid worries of lockdown it is anticipated that there will be slow supply and same with demand. In recent session prices as 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. Cotton sowing area in the State is expected to increase further in 2021-22 kharif in the backdrop of increase of cotton price in the open market during this season. Cotton price touched Rs 6,500 per quintal in the open market, while the Cotton Corporation of India (CCI) fixed the MSP of Rs 5,550 per quintal. At present, farmers in the State are sowing cotton in 15-lakh acres. The State government and Cotton Corporation of India are also in favour of increasing cotton sowing area in the State and making necessary arrangements to supply seeds and fertilisers to farmers. In Akola spot market, Cocudakl dropped by - 42.85 Rupees to end at 2709.3 Rupees per 100 kgs.Technically market is under long liquidation as market has witnessed drop in open interest by -4.14% to settled at 84590 while prices down -94 rupees, now Cocudakl is getting support at 2374 and below same could see a test of 2319 levels, and resistance is now likely to be seen at 2532, a move above could see prices testing 2635
Trading Idea for the day
Cocudakl trading range for the day is 2319-2635.
Cocudakl dropped amid worries of lockdown it is anticipated that there will be slow supply and same with demand
In recent session prices gained as supply of cottonseeds might become tight in the coming kharif season
Cotton sowing area is expected to increase further in 2021-22 kharif in the backdrop of increase of cotton price
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