Cotton trading range for the day is 21770-22250 - Kedia Advisory
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COTTON
Cotton yesterday settled down by -0.32% at 21980 tracking weakness in other commodities due to demand concerns amid rising COVID cases in Asian countries. The U.S. Department of Agriculture's weekly export sales report showed net sales of 103,100 running bales for 2020/2021, down 16% from the previous week and 44% from the prior 4-week average. Support also seen as CAI estimated cotton exports to increase by 20% to 60 lakh bales in the 2020-21 season that begins in October, mainly due to higher international prices. CAI increases the production estimate to 360 lakh bales on higher output in North India. The second wave of Covid-19 is taking its toll on Gujarat’s textile industry which saw at least 25% decline in fabric production in the past 15-20 days. Since the beginning of April, production of fabric has gone down in the state from around 5.50 crore metres to almost 4 crore metres per day. Demand from textile traders has gone down drastically. If the situation doesn’t improve in next fortnight period, production of fabric would further plummet to as low as 50%. If the lockdown increases in Bangladesh, Indian cotton exports will be affected. CAI Crop Committee has estimated the total cotton supply till end of the cotton season 2020-21, that is up to September 30, at 496 lakh bales. In spot market, Cotton gained by 20 Rupees to end at 22070 Rupees.Technically market is under fresh selling as market has witnessed gain in open interest by 0.48% to settled at 8870 while prices down -70 rupees, now Cotton is getting support at 21870 and below same could see a test of 21770 levels, and resistance is now likely to be seen at 22110, a move above could see prices testing 22250.
Trading Idea for the day
Cotton trading range for the day is 21770-22250.
Cotton prices dropped tracking weakness in other commodities due to demand concerns amid rising COVID cases in Asian countries.
However, CAI estimated cotton exports to increase by 20% to 60 lakh bales in the 2020-21 season that begins in October
USDA’s weekly export sales report showed net sales of 103,100 running bales for 2020/2021, down 16% from the previous week
Cocudakl
Cocudakl yesterday settled down by -4.07% at 2521 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 -48 Rupees to end at 2739.5 Rupees per 100 kgs.Technically market is under long liquidation as market has witnessed drop in open interest by -3.87% to settled at 95900 while prices down -107 rupees, now Cocudakl is getting support at 2462 and below same could see a test of 2403 levels, and resistance is now likely to be seen at 2590, a move above could see prices testing 2659.
Trading Idea for the day
Cocudakl trading range for the day is 2403-2659
Cocudakl dropped amid worries of lockdown it is anticipated that there will be slow supply and same with demand
Cotton sowing area is expected to increase further in 2021-22 kharif in the backdrop of increase of cotton price
Cotton Corporation of India are also in favour of increasing cotton sowing area
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