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Cotton

Cotton yesterday settled down by -0.5% at 25700 as the Southern India Mills’ Association (Sima) and Confederation of Indian Textile Industry (Citi) have thanked chief minister M K Stalin for removing the 1% cess on cotton and cotton waste. The decision would attract several private cotton traders and cotton corporation of India to open depots in Tamil Nadu and sell cotton to small-scale spinning mills. India is starting the next cotton season on a healthy note due to increased domestic consumption and healthy exports. Traders are optimistic that in the next season, the price of kapas (raw unginned seed cotton) will be higher than the government-declared Minimum Support Price (MSP) of Rs 5,726 per quintal. At the start of the 2021-22 cotton year, the opening stock with spinning mills and yarn markers would be around 80 lakh bales, which is a healthy carry-forward stock. Meanwhile, the Cotton Corporation of India has almost managed to offload the cotton stock it had procured during the last season. Bathinda Amid growing demand for raw cotton in the domestic and international yarn industry, the Cotton Corporation of India (CCI) and traders hope that this kharif season, more private players will buy the produce above its Minimum Support Price (MSP). In spot market, Cotton dropped by -70 Rupees to end at 26560 Rupees.Technically market is under long liquidation as market has witnessed drop in open interest by -1.32% to settled at 1720 while prices down -130 rupees, now Cotton is getting support at 25520 and below same could see a test of 25350 levels, and resistance is now likely to be seen at 25900, a move above could see prices testing 26110.

Trading Idea for the day

Cotton trading range for the day is 25350-26110.

Cotton prices dropped after removal of 1% cess on cotton, cotton waste

Increased domestic consumption and better demand for Indian yarns sets the tone for next cotton season

The Cotton Corporation of India has almost managed to offload the cotton stock it had procured during the last season.

Cocudakl

Cocudakl yesterday settled down by -1.58% at 2553 as crop seems to be in good condition after Gujarat received very good rainfall from last few days. 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 2906.25 Rupees per 100 kgs.Technically market is under long liquidation as market has witnessed drop in open interest by -8.87% to settled at 44160 while prices down -41 rupees, now Cocudakl is getting support at 2499 and below same could see a test of 2444 levels, and resistance is now likely to be seen at 2613, a move above could see prices testing 2672.

Trading Idea for the day

Cocudakl trading range for the day is 2444-2672

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

However downside were 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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