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Cotton

Cotton yesterday settled flat at 25620 as Cotton production in Gujarat is likely to grown by 10-12% in the new cotton season beginning October. Despite lower acreage, the output is expected to increase in 2021-22 due to the improved yield following recent spell of rain and favourable climatic condition. The 2021/22 marketing year for cotton began on August 1 and the yield increase reflected in the September WASDE indicates significant weather improvements. On the supply side, USDA revised cotton area planted down from 11.72 million acres in August to 11.19 million acres, which is down almost 7.5% compared to the 12.09 million acres planted in 2020. On the demand side for cotton, domestic use remained unchanged from August at 2.5 million 480-pound bales, an increase of 6% compared to 2020. However, estimates for cotton exports increased 500,000 480-pound bales from August to September, now registering 15.5 million 480- pound bales, which is still pacing about 5% behind exports in 2020 when 16.37 million 480-pound bales were exported. 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. In spot market, Cotton dropped by -70 Rupees to end at 26430 Rupees.Technically market is under fresh selling as market has witnessed gain in open interest by 1.15% to settled at 1752 while prices remain unchanged 0 rupees, now Cotton is getting support at 25550 and below same could see a test of 25490 levels, and resistance is now likely to be seen at 25650, a move above could see prices testing 25690

Trading Idea for the day

Cotton trading range for the day is 25490-25690.

Cotton prices settled flat as cotton production likely to rise by 12% in new season in Gujarat

USDA hiked its estimate for U.S. production and ending stocks for the 2021/22 marketing year

Industry bodies hail removal of 1% cess on cotton, cotton waste

Cocudakl

Cocudakl yesterday settled down by -1.67% at 2472 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 2831.25 Rupees per 100 kgs.Technically market is under fresh selling as market has witnessed gain in open interest by 4.18% to settled at 22440 while prices down -42 rupees, now Cocudakl is getting support at 2446 and below same could see a test of 2419 levels, and resistance is now likely to be seen at 2519, a move above could see prices testing 2565.

Trading Idea for the day

Cocudakl trading range for the day is 2419-2565

Cocudakl prices 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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