Cotton trading range for the day is 26870-27310 - Kedia Advisory
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COTTON
Cotton yesterday settled up by 1.04% at 27130 amid expectations of lower supply and increased demand from the textile industry as countries continue reopening efforts. World cotton stocks are projected at 89.3 million bales at the end of 2021/22, the lowest in three years. Meanwhile, global production is forecast 5% higher at 118.9 million bales, but still set to remain below 2019 record levels.
Output is expected to decline in China as the industry becomes less competitive with rising labour costs. On the other hand, high cotton yields are projected in the US, Brazil, Australia and Pakistan due to favorable weather conditions and the increasing harvested area. The USDA's weekly export sales report showed net sales of 251,900 running bales (RB) for the 2021/2022 marketing year, primarily for Turkey, Pakistan, Vietnam, Mexico, and China.
The report also showed exports of 246,100 RB for the new marketing year, up 32% from the previous week and 2% from the prior 4-week average. Pink bollworm attack on cotton crop has been reported in some areas in Bathinda district. Farmers are claiming damage on the cotton sown earlier. The pink bollworm attack has been reported in Talwandi Sabo, Sangat and Rama blocks along with few villages adjoining Bathinda city. In spot market, Cotton gained by 160 Rupees to end at 26880 Rupees.
Technically market is under fresh buying as market has witnessed gain in open interest by 0.38% to settled at 5572 while prices up 280 rupees, now Cotton is getting support at 27000 and below same could see a test of 26870 levels, and resistance is now likely to be seen at 27220, a move above could see prices testing 27310.
Trading Idea for the day
Cotton trading range for the day is 26870-27310.
Cotton prices gained amid expectations of lower supply and increased demand from the textile industry as countries continue re-opening efforts.
World cotton stocks are projected at 89.3 million bales at the end of 2021/22, the lowest in three years.
Meanwhile, global production is forecast 5% higher at 118.9 million bales, but still set to remain below 2019 record levels.
COCUDAKL
Cocudakl yesterday settled down by -0.97% at 2864 on profit booking after prices gained as the tight supply situation in cottonseed is expected to continue in the coming months considering the stronger demand.
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.
The USDA in its latest report has pegged global ending stocks in 2021/22 down 1.7 million bales to 89.3 million versus 2020/21. Global consumption estimate for is also higher for 2021/22, up 1.1 million bales year on year. In Akola spot market, Cocudakl dropped by - 13.95 Rupees to end at 2927.95 Rupees per 100 kgs.
Technically market is under fresh selling as market has witnessed gain in open interest by 1.56% to settled at 50910 while prices down -28 rupees, now Cocudakl is getting support at 2838 and below same could see a test of 2813 levels, and resistance is now likely to be seen at 2898, a move above could see prices testing 2933.
Trading Idea for the day
Cocudakl trading range for the day is 2813-2933.
Cocudakl dropped on profit booking after prices gained as the tight supply situation in cottonseed is expected to continue.
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.
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