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COTTON

Cotton yesterday settled down by -1.36% at 26910 as a pickup in late cotton sowing mainly in the southern States such as Andhra Pradesh and Telangana, could help bridge the gap in acreages witnessed, so far, in the ongoing kharif season. CAI expect sowing to go on till August-end across various states including Andhra, Telangana, Gujarat, Karnataka and Tamil Nadu as the prevailing higher prices will attract farmers’ interest. Cotton prices are ruling higher at ₹57,000 per candy (356 kgs), despite season-ending stocks being projected at 95 lakh bales for the season to September. According to the Agriculture Ministry’s estimates, cotton acreages till July 29 was 110.73 lakh hectares (lh) compared with the previous year’s 121.25 lh, lower by 8.68 per cent. In North India, the acreage is 17 per cent lower, while in central India the deficit is 5.33 per cent.

In the South, the acreage is lower by 12.6 per cent. The lower acreage is largely attributed to delayed rains, but trade expects sowing to go on till end August. However, yield and output will largely depend on rains during September-October. Last year, a crop of 75 lakh bales was expected in Telangana, but heavy rains during October impacted the crop badly reducing it to about 45 lakh bales, sources said. In spot market, Cotton dropped by -150 Rupees to end at 27240 Rupees.Technically market is under long liquidation as market has witnessed drop in open interest by -1.9% to settled at 5486 while prices down -370 rupees, now Cotton is getting support at 26680 and below same could see a test of 26460 levels, and resistance is now likely to be seen at 27280, a move above could see prices testing 27660.

Trading Idea for the day

Cotton trading range for the day is 26460-27660.

Cotton prices dropped as late sowing may bridge gap in cotton acreage.

CAI expect sowing to go on till August-end across various states including Andhra, Telangana, Gujarat, Karnataka and Tamil Nadu.

In Gujarat, Cotton sowing is done in 22,22,372 hectares, up by 0.28% from 2020.

COCUDAKL

Cocudakl yesterday settled up by 0.32% at 3088 as 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 as compared to last year’s 673.7 thousand hectares i.e down by -11.4% while for the current year the targeted area of sowing is 780 thousand hectares. Support seen as 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. 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 dropped by -15.95 Rupees to end at 3084.05 Rupees per 100 kgs.Technically market is under short covering as market has witnessed drop in open interest by -2.73% to settled at 39910 while prices up 10 rupees, now Cocudakl is getting support at 3034 and below same could see a test of 2979 levels, and resistance is now likely to be seen at 3132, a move above could see prices testing 3175.

Trading Idea for the day

Cocudakl trading range for the day is 2979-3175.

Cocudakl gained as 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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