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COTTON

Cotton yesterday settled down by -1.23% 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, as kapas prices are likely to rule above the minimum support prices (MSP) for a better part of the season. Procurement may be required during the peak season when prices drop below the MSP, top officials of the corporation said. As against 92 lakh bales that was procured in the 2020-21 season, the CCI may not be required to procure more than 30 lakh bales for the new season, Pradeep Kumar Agarwal, CMD of the CCI, told. As per CCPC data, the 2020-21 season began with an opening stock of 120 lakh bales and the crop size was 371 lakh bales with 11 lakh bales of imports, leading to a total supply of 502 lakh bales. The new season may begin with an opening stock of 60-70 lakh bales. As the U.S. cotton crop moves into late summer, it continues to look like one of the better overall crops seen in several years. In spot market, Cotton dropped by -220 Rupees to end at 27080 Rupees.Technically market is under long liquidation as market has witnessed drop in open interest by -11.58% to settled at 2061 while prices down -320 rupees, now Cotton is getting support at 25580 and below same could see a test of 25400 levels, and resistance is now likely to be seen at 26040, a move above could see prices testing 26320.

Trading Idea for the day

Cotton trading range for the day is 25400-26320.

Cotton dropped as production will still be high because of good rains and may touch 350-360 lakh bales despite the area has gone down by 6-8%.

Procurement may be required during the peak season when prices drop below the MSP, top officials of the corporation said.

As the U.S. cotton crop moves into late summer, it continues to look like one of the better overall crops seen in several years.

COCUDAKL

Cocudakl yesterday settled down by -1.5% at 3087 on profit booking after prices seen supported amid tight supply situation in cottonseed is expected to continue in the coming months considering the stronger demand. 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. The cotton crop estimate for the Central Zone has been reduced by 0.50 lakh bales to 193.50 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. Support also seen as tight supply situation in cottonseed is expected to continue in the coming months considering the stronger demand. In Akola spot market, Cocudakl gained by 6.75 Rupees to end at 3144.1 Rupees per 100 kgs.Technically market is under fresh selling as market has witnessed gain in open interest by 2.13% to settled at 58880 while prices down -47 rupees, now Cocudakl is getting support at 3058 and below same could see a test of 3029 levels, and resistance is now likely to be seen at 3133, a move above could see prices testing 3179

Trading Idea for the day

Cocudakl trading range for the day is 3029-3179

Cocudakl dropped on profit booking after prices seen supported 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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