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COTTON

Cotton yesterday settled up by 0.61% at 23210 due to the further possibility of higher exports. Support also seen as the daily arrivals have stopped, as farmers and stockists have less stock. Meanwhile, mill owners and exporters are hoping to restore their supplies for the next two-three months, while the new crop is more than three months away. According to the Third Advance Estimate released by the government, cotton production is estimated at 36.49 million bales higher by 4.59 million bales than the average cotton production. In the previous season 2019-20 cotton production was estimated at 36.07 million bales. The U.S. Department of Agriculture's (USDA) weekly export sales report showed net sales of 171,200 Running Bales for the 2020/2021 marking year, 59% higher than the prior week. CAI has revised higher Indian cotton export estimates for 2020-21 season at 65 lakh bales against 60 lakh bales projected till last month. Cotton production in Haryana is expected to decline by 27 percent to 1.8 million bales in 2020-21 (July-June) season due to yield loss. The country’s cotton exports are likely to be 20 percent higher at 1.02 million tonnes in 2020-21 (OctoberSeptember) backed by competitive pricing in the global markets and an improvement in international cotton consumption, said Care Rating. In spot market, Cotton gained by 50 Rupees to end at 23020 Rupees.Technically market is under fresh buying as market has witnessed gain in open interest by 2.07% to settled at 7247 while prices up 140 rupees, now Cotton is getting support at 23060 and below same could see a test of 22920 levels, and resistance is now likely to be seen at 23300, a move above could see prices testing 23400.

Trading Idea for the day

Cotton trading range for the day is 22920-23400

Cotton prices gained due to the further possibility of higher exports

Cotton prices gained due to the further possibility of higher exports

USDA sales report showed net sales of 171,200 Running Bales for the 2020/2021 marking year, 59% higher than the prior week.

Cocudakl

Cocudakl yesterday settled up by 4.42% at 2672 tracking rise in cotton prices amid prospects of higher exports and falling supply in the physical market. However there were worries of lockdown it is anticipated that there will be slow supply and same with demand. 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. 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. 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 38.9 Rupees to end at 2752.9 Rupees per 100 kgs.Technically market is under short covering as market has witnessed drop in open interest by -9.49% to settled at 89750 while prices up 113 rupees, now Cocudakl is getting support at 2591 and below same could see a test of 2509 levels, and resistance is now likely to be seen at 2719, a move above could see prices testing 2765.

Trading Idea for the day

Cocudakl trading range for the day is 2509-2765.

Cocudakl gained tracking rise in cotton prices amid prospects of higher exports and falling supply in the physical market.

However there were worries of lockdown it is anticipated that there will be slow supply and same with demand.

2021/22 global cottonseed production is projected at nearly 44 million tons, up 5 percent from the current year.

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