IGI Logo

Cotton

Cotton yesterday settled up by 0.31% at 25580 as the area of cotton cultivation in Marathwada has reduced during this kharif season as more farmers have opted for soyabean over the traditional cash crop, implying a gradual shift in the cropping pattern in the region.

Cotton sowing has taken place only on 67% of the expected area of 6.97 lakh hectare in the Aurangabad division and 65% of the expected area (3.58 lakh hectare) in the Latur division. India’s cotton ending stocks could be lower than 75 lakh bales (170 kg each) in the current season to September as domestic demand has picked up. But some estimates are pegging them higher than 100 lakh bales against a record 120-plus lakh bales last season.

CCI, which had nearly 207 lakh bales of cotton stocks, could be left with 18 lakh bales by the end of the season, the CMD said, adding that most of the sales were meant for domestic consumption. Some trade experts expect mills’ consumption to top 300 lakh bales, though Southern India Mills Association (SIMA) Secretary-General K Selvaraju said the shutdown due to Covid pandemic could lower the offtake below CCPC projections.

In spot market, Cotton gained by 150 Rupees to end at 25530 Rupees.Technically market is under short covering as market has witnessed drop in open interest by -9.66% to settled at 3770 while prices up 80 rupees, now Cotton is getting support at 25470 and below same could see a test of 25360 levels, and resistance is now likely to be seen at 25680, a move above could see prices testing 25780.

Trading Idea for the day

Cotton trading range for the day is 25360-25780.

Cotton prices gained as the area of cotton cultivation in Marathwada has reduced during this kharif season.

India’s cotton ending stocks could be lower than 75 lakh bales in the current season as domestic demand has picked up.

CCI said cotton exports would exceed 70 lakh bales and the current shipments were competitive globally.

Cocudakl

Cocudakl yesterday settled up by 2.17% at 2918 as there is a possibility of damage to the crops which have been sown due to less rain for the next several days. The tight supply situation in cottonseed is expected to continue in the coming months considering the stronger demand.

Support seen as falling arrival numbers of raw cotton due to the lean supply season and thin stocks lying with ginners and farmers has resulted in supply crunch in the market. The demand and supply balance sheet for cotton is indicative of prices to remain firm in coming months.

The USDA in its latest report has pegged global ending stocks in 2021/22 down 1.7 million bales to 89.3 million versus 2020/21. Global consumption estimate for is also higher for 2021/22, up 1.1 million bales year on year. World trade on the other hand is estimated 1.1 million bales higher, considering better import possibilities from China, Bangladesh, and Turkey. The industry remains optimistic demand for Indian cotton products to improve in near term from the global economic rebound. The CAI has kept its consumption estimate for the current crop year at 330 lakh bale in the previous month.

In Akola spot market, Cocudakl gained by 50 Rupees to end at 2950 Rupees per 100 kgs.Technically market is under short covering as market has witnessed drop in open interest by - 3.73% to settled at 60110 while prices up 62 rupees, now Cocudakl is getting support at 2875 and below same could see a test of 2831 levels, and resistance is now likely to be seen at 2953, a move above could see prices testing 2987.

Trading Idea for the day

Cocudakl trading range for the day is 2831-2987.

Cocudakl prices gained as there is a possibility of damage to the crops which have been sown due to less rain for the next several days.

The tight supply situation in cottonseed is expected to continue.

Support seen amid falling arrival numbers of raw cotton due to the lean supply season and thin stocks.

To Read Complete Report & Disclaimer Click Here

Views express by all participants are for information & academic purpose only. Kindly read disclaimer before referring below views. Click Here For Disclaimer