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COTTON

Cotton yesterday settled down by -1.6% at 25770 as cotton production will still be high because of good rains and may touch 350-360 lakh bales despite the area under coverage has gone down by 6-8%, from 133 lakh hectares last year to 125 lakh hectares in the current season. In the domestic market prices are capped as higher supplies in the Gujarat & Maharashtra spot markets due to easing lockdown. Weather may impact soyabean, cotton, sugarcane and paddy crops. High-value and sensitive crops such as soyabean, cotton, sugarcane, and paddy have been affected, he said. In Madhya Pradesh, soyabean crop could be 20 percent in some areas. Cotton sowing is progressing across India for the coming 2021-22 season. Cotton sowing across India has reached 116.17 lakh hectares compared to previous season sowing at 116.38 lakh hectares during the same time. Global Cotton stock for the 2021-22, has been revised lower by 50,000 bales. In the other estimates for 2021-22, as largely offsetting changes in production and consumption do little to offset lower estimated beginning stocks. Egyptian cotton production and exports may rise in marketing year (MY) 2021-22 as the country’s area under cotton harvest is likely to increase to 85,000 hectares, a 30.77 per cent growth over previous MY’s area of 65,000 hectares. The expected increase in cotton production coupled with the rising demand across the world will boost the country’s exports. In spot market, Cotton dropped by -150 Rupees to end at 26970 Rupees.Technically market is under fresh selling as market has witnessed gain in open interest by 7.51% to settled at 1488 while prices down -420 rupees, now Cotton is getting support at 25510 and below same could see a test of 25240 levels, and resistance is now likely to be seen at 26120, a move above could see prices testing 26460.

Trading Idea for the day

Cotton trading range for the day is 25240-26460.

Cotton dropped as cotton production will still be high because of good rains and may touch 350-360 lakh bales

Cotton sowing across India has reached 116.17 lakh hectares compared to previous season sowing at 116.38 lakh hectares during the same time.

Exports are 200,000 bales lower than in July, and ending stocks are 300,000 bales lower, equating to 17% of expected use, the same as in 2020/21.

COCUDAKL

Cocudakl yesterday settled down by -1.79% at 2751 on profit booking after prices gained amid tight supply situation in cottonseed is expected to continue in the coming months considering the stronger demand. However upside seen limited as cotton production will still be high because of good rains and may touch 350-360 lakh bales despite the area under coverage has gone down by 6-8%, from 133 lakh hectares last year to 125 lakh hectares in the current season, as kapas prices are likely to rule above the minimum support prices (MSP) for a better part of the season. The Cotton Association of India (CAI), in its July estimate of the cotton crop for the season 2020-21 beginning October 1, 2020, has reduced the crop estimate by 1.50 lakh bales to 354.50 lakh bales from its previous estimate of 356 lakh bales (equivalent to 378.25 lakh running bales). The CAI has maintained its cotton crop estimate for the Northern Zone at the same level as in its previous month’s estimate i.e. at 65.50 lakh bales. "There is a reduction of 2.50 lakh bales in the crop estimate for Gujarat state, while the crop estimates of Maharashtra & Madhya Pradesh have been increased by 1.50 lakh bales and 0.50 lakh bales respectively compared to the estimates of these states made in the previous month," CAI said. In Akola spot market, Cocudakl dropped by -5.25 Rupees to end at 3112.4 Rupees per 100 kgs.Technically market is under long liquidation as market has witnessed drop in open interest by -0.45% to settled at 54800 while prices down -50 rupees, now Cocudakl is getting support at 2717 and below same could see a test of 2684 levels, and resistance is now likely to be seen at 2796, a move above could see prices testing 2842.

Trading Idea for the day

Cocudakl trading range for the day is 2684-2842.

Cocudakl dropped on profit booking after prices gained amid tight supply situation in cottonseed is expected to continue

CAI in its July estimate of the cotton crop for the season 2020-21, has reduced the crop estimate by 1.50 lakh bales to 354.50 lakh bales

The cotton crop estimate for the Central Zone has been reduced by 0.50 lakh bales to 193.50 lakh bales

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