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Cotton

Cotton yesterday settled up by 0.28% at 25420 on concern over crop damage in the state due to pink bollworm infestation. The way it is raining in the whole country since last 15 days, it has started damaging the cotton crop. Cotton sown this year is 8% less as compared to last year and this rain has damaged the crop. Production of cotton estimated at 36.22 million bales (of 170 kg each) and production of Jute & Mesta estimated at 9.61 million bales (of 180 kg each). The new cotton crop has begun arriving in northern markets, Karnataka and Telangala with prices of kapas (raw cotton) ruling at least 10 per cent higher than the minimum support price (MSP) levels fixed by the Centre for the new season starting October. The overall crop condition is good as on date and, based on the feedback from the 10 growing States, the yield will be much higher this year and quality very good. The demand is slow as most of the spinning mills have covered their needs till December. If the moisture comes down, demand may improve over the next couple of weeks. In September WASDE report, the USDA projected U.S. production at 18.5 million bales, 1.2 million bales higher than the previous month. In spot market, Cotton dropped by -70 Rupees to end at 26420 Rupees.Technically market is under fresh buying as market has witnessed gain in open interest by 0.32% to settled at 1862 while prices up 70 rupees, now Cotton is getting support at 25370 and below same could see a test of 25310 levels, and resistance is now likely to be seen at 25480, a move above could see prices testing 25530.

Trading Idea for the day

Cotton trading range for the day is 25310-25530.

Cotton prices remained supported on concern over crop damage in the state due to pink bollworm infestation.

Cotton sown this year is 8% less as compared to last year and this rain has damaged the crop

Cotton harvest likely to be delayed amid flooding in Saurashtra region in Gujarat

Cocudakl

Cocudakl yesterday settled down by -0.24% at 2496 as crop seems to be in good condition after Gujarat received very good rainfall from last few days. However downside seen limited amid tight supply situation in cottonseed is expected to continue in the coming months considering the stronger demand. 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. The U.S. Department of Agriculture forecast lower production and also cut ending stocks estimates for the 2021/22 marketing year in a monthly report. In its WASDE report, the USDA projected lower U.S. production, exports and ending stocks compared with July, as well as lower world 2021/22 ending stocks. 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. 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. In Akola spot market, Cocudakl dropped by -23.55 Rupees to end at 2806.25 Rupees per 100 kgs.Technically market is under long liquidation as market has witnessed drop in open interest by -0.76% to settled at 25990 while prices down -6 rupees, now Cocudakl is getting support at 2478 and below same could see a test of 2461 levels, and resistance is now likely to be seen at 2516, a move above could see prices testing 2537

Trading Idea for the day

Cocudakl trading range for the day is 2461-2537.

Cocudakl dropped as crop seems to be in good condition after Gujarat received very good rainfall from last few day

However downside seen limited amid tight supply situation in cottonseed is expected to continue in the coming months considering the stronger demand

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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