Cotton trading range for the day is 25690-27290 - Kedia Advisory
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COTTON
Cotton yesterday settled down by -0.75% at 26350 on profit booking after prices rose as 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 World Agricultural Supply and Demand Estimates (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. FAS Mumbai forecasts market year (MY) 2021/2022 cotton production at 29 million (480 lb.) bales on an area of 12.9 million hectares. Kharif cotton planting is now underway in central and southern India as the two-week monsoon delay has been followed by intense rains across the major cotton producing states. With market arrivals slowing, seed cotton prices are rising. Mill consumption is good at 25.5 million bales buoyed by strong export orders, and the recent government announcement of a three-year extension of the Rebate of State and Central taxes and Levies (ROSCTL) scheme for the export of apparel/garments and made-ups." Production of Cotton is estimated at 35.38 million bales (of 170 kg each) is higher by 3.49 million bales than the average cotton production. In spot market, Cotton gained by 230 Rupees to end at 27250 Rupees.Technically market is under long liquidation as market has witnessed drop in open interest by -7.09% to settled at 3172 while prices down -200 rupees, now Cotton is getting support at 26020 and below same could see a test of 25690 levels, and resistance is now likely to be seen at 26820, a move above could see prices testing 27290.
Trading Idea for the day
Cotton trading range for the day is 25690-27290
Cotton dropped on profit booking after prices rose as USDA forecast lower production and also cut ending stocks estimates.
The USDA projected lower U.S. production, exports and ending stocks compared with July, as well as lower world 2021/22 ending stocks.
India's 2021/22 cotton production seen at 29 mln bales – USDA
COCUDAKL
Cocudakl yesterday settled up by 0.74% at 3131 as 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. According to the India Department of Agriculture’s All India Crop Situation report, planting progress in the central region, which comprises 75 percent of total cotton production, is down nearly 5 percent from the same period last year. In Akola spot market, Cocudakl gained by 82.75 Rupees to end at 3167.75 Rupees per 100 kgs.Technically market is under short covering as market has witnessed drop in open interest by -1.19% to settled at 60670 while prices up 23 rupees, now Cocudakl is getting support at 3102 and below same could see a test of 3073 levels, and resistance is now likely to be seen at 3180, a move above could see prices testing 3229.
Trading Idea for the day
Cocudakl trading range for the day is 3073-3229
Cocudakl prices gained as reduces India's 2020-21 cotton crop estimate to 354.5 lakh bales
Support also seen as tight supply situation in cottonseed is expected to continue in the coming months considering the stronger demand.
Planting progress in the central region, is down nearly 5 percent from the same period last year.
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