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COTTON

Cotton yesterday settled down by -0.42% at 26110 as all India, Cotton sowing reported about 116.17 lakh ha area compared to normal of corresponding week (114.22 lakh ha). Thus 1.95 lakh ha more area has been covered compared to normal of corresponding week. The U.S. Department of Agriculture's weekly export sales report showed net sales of 149,300 running bales (RB) for the 2021/2022 marketing year and exports of 229,500 RB, down 4% from the previous week and 5% from the prior 4-week average. Cotton sowing across the country has picked up with the revival of monsoon in several states, after seeing a lull in the month of July due to a dry spell. Sowing in the north is almost complete with Punjab reporting a slight dip. The sowing has been normal in Haryana while Rajasthan and Gujarat had reported dry spells. There has been a dip in Maharashtra since farmers shifted to other crops like soybean and groundnut, but some pick up is likely in Andhra Pradesh and Tamil Nadu. The lower acreage is largely attributed to delayed rains. But with kapas prices ruling at Rs 8000 per quintal, sowing is expected to continue till August-end across various states including Andhra, Telangana, Gujarat, Karnataka and Tamil Nadu. In spot market, Cotton gained by 160 Rupees to end at 27040 Rupees.Technically market is under long liquidation as market has witnessed drop in open interest by -7.37% to settled at 3869 while prices down -110 rupees, now Cotton is getting support at 25950 and below same could see a test of 25780 levels, and resistance is now likely to be seen at 26370, a move above could see prices testing 26620.

Trading Idea for the day

Cotton trading range for the day is 25780-26620

Cotton prices dropped as all India, Cotton sowing reported about 116.17 lakh ha area i.e up by 1.71%

The government said there is excess availability of local cotton, which the textile and apparel industry should tap into and support farmers hit by a surge in imports.

The cotton Association of India has sought withdrawal of the 10% duty levied on imports saying the commodity has become costly

COCUDAKL

Cocudakl yesterday settled up by 0.94% at 2992 supported by the tight supply situation in cottonseed is expected to continue in the coming months considering the stronger demand. Falling arrival numbers of raw cotton due to the lean supply season and thin stocks lying with ginners and farmers. The CAI has kept its consumption estimate for the current crop year at 330 lakh bale in the previous month. Further, downside look limited as support can be seen drop on yield as Maharashtra faces pink bollworm attack. The new season for cotton will start only in October. The probability of consumption of cotton cake shifting towards mixing in the animal feed rations has increased this year because of soy meal turning quite expensive over previous years. The all India sowing area of cotton had reached 86.45 lakh hectares. The acreage was 104.83 lakh hectares during the corresponding period of last year. Sowing will increase in coming weeks subject to improvement in the rainfall intensity in states of Gujarat/ Maharashtra/ Karnataka, Andhra Pradesh and Telangana. In Akola spot market, Cocudakl gained by 1.4 Rupees to end at 3062.2 Rupees per 100 kgs.Technically market is under fresh buying as market has witnessed gain in open interest by 8.1% to settled at 62200 while prices up 28 rupees, now Cocudakl is getting support at 2962 and below same could see a test of 2931 levels, and resistance is now likely to be seen at 3023, a move above could see prices testing 3053.

Trading Idea for the day

Cocudakl trading range for the day is 2931-3053

Cocudakl gained supported by the tight supply situation in cottonseed is expected to continue in the coming months considering the stronger demand.

In Rajasthan, Cotton sowing is done in 596.7 thousand hectares down by - 11.4%

Support seen as falling arrival numbers of raw cotton due to the lean supply season and thin stocks lying with ginners and farmers.

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