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COTTON

Cotton yesterday settled up by 1.88% at 24380 amid firmness in overseas prices after a weekly federal report showed higher export sales of the natural fiber. Cotton sowing area grows despite of delays. Despite sowing of cotton stretching beyond the ideal sowing time in Punjab, it is close to reaching the target for 2021- 22. The state agriculture department had the target of sowing cotton on 3.25 lakh hectares the crop had been sown over 3.01 lakh hectares. New figures show global cotton stock levels are set to increase to 22m tonnes by the end of 2020/21 as the stocks-to-use ratio declines. According to the latest update from the International Cotton Advisory Committee (ICAC), China’s stocks, however, are expected to decline as the rest of the world’s expands slightly. Cotton consumption is expected to increase by 2% to 25.3m tonnes as the global economy continues to recover. Decreases in Brazil, India and the US have caused a reduction in the 2020/21 global production estimate but cotton production — along with consumption and trade — are all expected to increase in 2021/22: Production is expected to increase by 5% to 25.5m tonnes, with increases in planted areas in the US and West Africa. In spot market, Cotton gained by 360 Rupees to end at 24130 Rupees.Technically market is under short covering as market has witnessed drop in open interest by -20.92% to settled at 5784 while prices up 450 rupees, now Cotton is getting support at 24110 and below same could see a test of 23840 levels, and resistance is now likely to be seen at 24570, a move above could see prices testing 24760.

Trading Idea for the day

Cotton trading range for the day is 23840-24760.

Cotton prices gained amid firmness in overseas prices after a weekly federal report showed higher export sales of the natural fiber.

Cotton stock levels are set to increase to 22m tonnes by the end of 2020/21

According to the latest update from the ICAC, China’s stocks, however, are expected to decline as the rest of the world’s expands slightly.

Cocudakl

Cocudakl yesterday settled up by 4.54% at 3017 as 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. Support also seen 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. 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 75.85 Rupees to end at 2934.35 Rupees per 100 kgs.Technically market is under fresh buying as market has witnessed gain in open interest by 16.25% to settled at 56160 while prices up 131 rupees, now Cocudakl is getting support at 2953 and below same could see a test of 2890 levels, and resistance is now likely to be seen at 3056, a move above could see prices testing 3096.

Trading Idea for the day

Cocudakl trading range for the day is 2890-3096.

Cocudakl prices seen supported as Cottonseed production and quality were affected

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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