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COTTON

Cotton yesterday settled up by 0.46% at 26420 as outlook remains supportive amid higher demand from the textile industries. In the domestic market prices are capped as higher supplies in the Gujarat & Maharashtra spot markets due to easing lockdown. Spot prices have not shown any major movement, because monsoon recoveries led to pick up of sowing in various states. Weather may impact soyabean, cotton, sugarcane and paddy crops. High-value and sensitive crops such as soyabean, cotton, sugarcane, and paddy have been affected, he said. In Madhya Pradesh, soyabean crop could be 20 percent in some areas. Cotton sowing is progressing across India for the coming 2021- 22 season. Cotton sowing across India has reached 116.17 lakh hectares compared to previous season sowing at 116.38 lakh hectares during the same time. Global Cotton stock for the 2021-22, has been revised lower by 50,000 bales. In the other estimates for 2021-22, as largely offsetting changes in production and consumption do little to offset lower estimated beginning stocks. Exports are 200,000 bales lower than in July, and ending stocks are 300,000 bales lower, equating to 17% of expected use, the same as in 2020/21. Lower production is reducing this month's 2021-22 global ending stocks forecast slightly. In spot market, Cotton dropped by -300 Rupees to end at 26820 Rupees.Technically market is under fresh buying as market has witnessed gain in open interest by 27.97% to settled at 1130 while prices up 120 rupees, now Cotton is getting support at 26110 and below same could see a test of 25790 levels, and resistance is now likely to be seen at 26640, a move above could see prices testing 26850.

Trading Idea for the day

Cotton trading range for the day is 25790-26850

Cotton outlook remains supportive amid higher demand from the textile industries

Cotton sowing across India has reached 116.17 lakh hectares compared to previous season sowing at 116.38 lakh hectares during the same time

Exports are 200,000 bales lower than in July, and ending stocks are 300,000 bales lower, equating to 17% of expected use, the same as in 2020/21.

COCUDAKL

Cocudakl yesterday settled down by -0.71% at 2955 on profit booking 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. However downside seen limited 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. "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. In Akola spot market, Cocudakl dropped by -5.25 Rupees to end at 3112.4 Rupees per 100 kgs.Technically market is under long liquidation as market has witnessed drop in open interest by -4.32% to settled at 59090 while prices down -21 rupees, now Cocudakl is getting support at 2902 and below same could see a test of 2849 levels, and resistance is now likely to be seen at 3009, a move above could see prices testing 3063.

Trading Idea for the day

Cocudakl trading range for the day is 2849-3063.

Cocudakl dropped on profit booking as cotton production will still be high because of good rains and may touch 350-360 lakh bales.

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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