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COTTON

Cotton yesterday settled down by -0.94% at 22050 as US Department of Agriculture (USDA) has pegged India’s cotton production next season (October 2021 - September 2022) at 378 lakh bales (of 170 kg each), up four per cent from its current season’s estimate of 362.5 lakh bales. But the Indian textile industry feels that it is too early to make any projection, given the vagaries of the SouthWest Monsoon. In its “Cotton and Products Update”, it said that the higher production would be in view of yield increasing by five per cent as the SouthWest Monsoon has been forecast to be normal by the India Meteorological Department (IMD). The projection has been made despite the USDA pegging the area under cotton lower at 129 lakh hectares compared with 130 lakh hectares. Sowing of cotton is scheduled to begin shortly in States such as Punjab and Haryana, while in other States it will start next month. The USDA’s cotton projection next season is also against India’s Committee for Cotton Production and Consumption (CCPC), which has all stakeholders including government officials on board, estimating the current season’s production at 360 lakh bales at its meeting held on April 30 this year. In spot market, Cotton gained by 10 Rupees to end at 22430 Rupees.Technically market is under long liquidation as market has witnessed drop in open interest by -3.97% to settled at 6100 while prices down -210 rupees, now Cotton is getting support at 21870 and below same could see a test of 21700 levels, and resistance is now likely to be seen at 22180, a move above could see prices testing 22320.

Trading Idea for the day

Cotton trading range for the day is 21700-22320.

Cotton prices dropped as output projected at 378 lakh bales on 5% higher yield

But the Indian textile industry feels that it is too early to make any projection, given the vagaries of the South-West Monsoon.'

Sowing of cotton is scheduled to begin shortly in States such as Punjab and Haryana, while in other States it will start next month.

Cocudakl

Cocudakl yesterday settled down by -2.27% at 2632 on profit booking after 2021/22 global cottonseed production is projected at nearly 44 million tons, up 5 percent from the current year. Higher forecasts for the United States, Brazil, Australia, and Mali are partially offset by declines in China. U.S. production is forecast up 781,000 tons to nearly 5 million. Prices gained in recent sessions due to a scarcity of cottonseed in spot markets, amid a broad rally in the edible oil complex. A sharp rally in the edible oil complex has also supported prices of cotton wash oil, as there is higher demand for cotton seed for crushing purposes. Waning arrivals of raw cotton due to the fag end of the season and limited stocks of cottonseed with ginners has led to a supply crunch in the market. India has produced around 36 mln bales in the ongoing 2020-21 (Oct-Sep) season, of which nearly 33 mln bales, or 92% of the stock, has already arrived in the market. Considering firm demand outlook for the commodity, the tight supply situation in cottonseed is expected to continue in the coming months as well as the new season for cotton will start only in October. In Akola spot market, Cocudakl gained by 2.15 Rupees to end at 2820.7 Rupees per 100 kgs.Technically market is under fresh selling as market has witnessed gain in open interest by 6.06% to settled at 106910 while prices down -61 rupees, now Cocudakl is getting support at 2608 and below same could see a test of 2585 levels, and resistance is now likely to be seen at 2672, a move above could see prices testing 2713.

Trading Idea for the day

Cocudakl trading range for the day is 2585-2713.

Cocudakl dropped on profit booking after 2021/22 global cottonseed production is projected at nearly 44 million tons, up 5 percent

Farmers may increase the area under cotton in the upcoming kharif season due to forecast of a good monsoon

Higher forecasts for the United States, Brazil, Australia, and Mali are partially offset by declines in China.

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