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Cotton

Cotton yesterday settled down by -1.49% at 21890 after Spinning mills of Maharashtra asked CCI to increase subsidy on cotton procurement. However downside seen limited on hopes demand would benefit from a global economic rebound amid concerns over a shortage in supply. India’s cotton exports may increase by about 30 per cent for the current crop year (October 2020- September 2021) as rising global prices have made the fibre competitive. Exports could be between 65 and 70 lakh bales compared with 50 lakh bales the previous year. The bullishness on cotton exports, after traders pruned their projections to 54 lakh bales last month, follows cotton prices in New York topping 89 cents per pound (₹45,924 a candy of 356 kg). CCI, under the Centre’s procurement scheme at minimum support prices (MSP), has purchased 91.8 lakh bales accounting for nearly 25 per cent of the projected crop this year. The Committee on Cotton Production and Consumption (CCPC) has estimated this year’s production at 371 lakh bales compared with 365 lakh bales last year. The Cotton Association of India (CAI), a body of traders, has retained its production estimate at 360 lakh bales. India holds an advantage with high carryover stocks of over 110 lakh bales from last year. In spot market, Cotton dropped by -220 Rupees to end at 21890 Rupees. Technically market is under long liquidation as market has witnessed drop in open interest by -2.56% to settled at 9187 while prices down -330 rupees, now Cotton is getting support at 21750 and below same could see a test of 21610 levels, and resistance is now likely to be seen at 22040, a move above could see prices testing 22190.

Trading Idea for the day

* Cotton trading range for the day is 21610-22190

* Cotton dropped after spinning mills of Maharashtra asked CCI to increase subsidy on cotton procurement.

* However downside seen limited on hopes demand would benefit from a global economic rebound amid concerns over a shortage in supply.

* India’s cotton exports may increase by about 30 per cent for the current crop yea

Cocudakl

Cocudakl yesterday settled down by -2.89% at 2220 tracking weakness in cotton prices as the market is getting cotton supplies from the Cotton Corporation of India. This year the production of cotton is being reported in the country at 360 million bales and till now 270-275 lakh bales are being said to come in, while the arrival is not more than 225 lakh bales. There will be a shortage of raw material cottonseed in the coming time, which does not seem to be a major fall in the prices of cotton seed oil cake. CAI has kept its consumption estimate for the current crop year at 330.00 lakh bale in the previous month. Last season's consumption was 250 million bales due to disruptions caused by the Covid-19 epidemic. The Cotton Corporation of India (CCI) has sold around 1.28 crore bales (170 kg each) to millers and traders in the 2020-21 season, top officials at the corporation said. According to USDA, India’s production estimate is reduced by 500,000 bales after considering the rising instances of pest infestation, while Pakistan’s production may be 200,000 bales higher and Australia 100,000 bales higher. World consumption is projected 1.5 million bales higher this month, with China’s forecast 1.0 million bales higher reflecting growing domestic textile demand and exports. In Akola spot market, Cocudakl dropped by -4.95 Rupees to end at 2358.35 Rupees per 100 kgs. Technically market is under long liquidation as market has witnessed drop in open interest by -3.5% to settled at 104080 while prices down -66 rupees, now Cocudakl is getting support at 2199 and below same could see a test of 2177 levels, and resistance is now likely to be seen at 2260, a move above could see prices testing 2299.

Trading Idea for the day

* Cocudakl trading range for the day is 2177-2299.

* Cocudakl dropped tracking weakness in cotton prices as the market is getting cotton supplies from the Cotton Corporation of India.

* This year the production of cotton is being reported in the country at 360 million bales and till now 270-275 lakh bales are being said to come in.

* There will be a shortage of raw material cottonseed in the coming time, which does not seem to be a major fall in the prices of cotton seed oil cake.

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