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COTTON

Cotton yesterday settled down by -0.41% at 21850 due to increase in COVID-19 cases, mills are now in a mode of wait and watch. Some support seen earlier in the week after USDA in its annual outlook, said that the area under cotton could remain stagnant or drop two per cent from about 13 million hectares (mh) this season. However, the cotton sector is split over its view on the prospects for the fibre crop next crop year (July 2021-June 2022) with a section saying that the area under the crop might increase, while the other expressing pessimism over the prospects of a higher acreage. This is despite growers getting higher than minimum support price (MSP) for most part of the current season and States such as Telangana declaring their intention to bring more acreage under the fibre crop. “The area under cotton will increase next season since the kapas (raw cotton) rate is ruling at ₹6,500-6,600 a quintal. That is almost 15 per cent higher than the MSP,” said Cotton Association of India President Atul Ganatra. For this season, the Centre has fixed the MSP for medium staple cotton at ₹5,515 a quintal. “Chances of a higher acreage in cotton are bright as it is the most attractive cash crop,” said K Selvaraju, Secretary-General, Southern India Mills Association – a representative body of the textile industry in the southern region. In spot market, Cotton gained by 70 Rupees to end at 22090 Rupees. Technically market is under long liquidation as market has witnessed drop in open interest by - 2.8% to settled at 6861 while prices down -90 rupees, now Cotton is getting support at 21760 and below same could see a test of 21680 levels, and resistance is now likely to be seen at 21980, a move above could see prices testing 22120.

Trading Idea for the day

Cotton trading range for the day is 21430-21850.

Cotton prices gained as India’s export of cotton grew by 106 percent

Support also seen after USDA federal monthly supply and demand report hiked projections for U.S exports and lowered estimates for ending stocks.

According to USDA farmers can turn to other crops instead of cotton, which can reduce its acreage by two percent.

Cocudakl

Cocudakl yesterday settled up by 1.8% at 2711 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. It is expected to touch 18-lakh to 20-lakh acres in the kharif season. About 150 spinning mills in the State are generating 2-lakh jobs. 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 gained by 51.05 Rupees to end at 2722 Rupees per 100 kgs. Technically market is under fresh buying as market has witnessed gain in open interest by 8.09% to settled at 120890 while prices up 48 rupees, now Cocudakl is getting support at 2676 and below same could see a test of 2640 levels, and resistance is now likely to be seen at 2739, a move above could see prices testing 2766.

Trading Idea for the day

Cocudakl trading range for the day is 2625-2747

Cocudakl prices dropped on profit booking as rise in Covid cases dampened demand after prices seen supported as supply of cottonseeds might become tight

Maharashtra to write to Centre, urge rollback of cotton seed price hike

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

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