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Cotton

Cotton yesterday settled down by -2.29% at 29840 as the CAI has reduced its cotton crop estimate for the 2022- 23 season to 339.75 lakh bales of 170 kgs each. This season, Punjab has seen a drastic decline in the arrival of Kapas (raw unginned cotton). Nearly 73% less cotton arrived in mandis compared to the arrival in the same period last year. This year, the yield of the crop has also been low. The less arrival is affecting the business of both ginners, who separate cotton from seed, and spinners, who make thread from cotton, as they are getting less raw material from the local market even during season. The cotton production in the Haryana this year is estimated to be around 35 per cent more than the last year. Against the production of around 13.16 lakh cotton bales last year, the production this year is estimated to be around 17.79 lakh bales. According to USDA, World Cotton and Market Report, Global cotton production is estimated down by 700,000 bales from the previous month to 115.7 million, largely owing to lower production in Pakistan. Pakistan production has fallen due to floods and poor weather. Global stocks are forecasted higher with consumption projected lower more than 3.0 million bales. This is the seventh consecutive monthly decline for global consumption. In spot market, Cotton dropped by -760 Rupees to end at 30590 Rupees.Technically market is under long liquidation as the market has witnessed a drop in open interest by -8.59% to settle at 1533 while prices are down -700 rupees, now Cotton is getting support at 29300 and below same could see a test of 28760 levels, and resistance is now likely to be seen at 30610, a move above could see prices testing 31380.

Trading Idea for the day

Cotton trading range for the day is 29690-30510.

Cotton gains as support seen after CAI pegs down its cotton crop estimate for 2022-23 season by 4.25 lakh bales to 339.75 lakh bales

Cotton arrival in mandis of Punjab down by 73% this year

The cotton production in the Haryana this year is estimated to be around 35 per cent more than the last year.

Cocudakl

Cocudakl yesterday settled up by 0.56% at 2717 as available stock is estimated to be very limited, the quality of which is also very weak. Reports of rising area under cotton and increased availability of green fodder kept cotton seed oil cake prices down. Support also seen after reports that there is a forecast of damage due to heavy rains after sowing of cotton in Vidarbha and Khandesh parts of Maharashtra. Sporadic arrivals of new cotton have already started in Haryana and Punjab, while the arrival of new cotton will start in Khandesh at the end of August and in Madhya Pradesh in September. All India Mandi arrivals of Kapas fell by around 82% on M-o-M basis; they were also lower by around 19% on Y-o-Y basis. Gujarat is a major producer of cotton across the country and reports of increase in sowing of cotton by at least 20% in Gujarat are coming. As per CAI, total cotton supply till end of the cotton season 2021-22 is estimated at 402.16 lakh bales of 170 kg each, lower by around 18% as compared to 488 lakh bales last year. Cocudakl’s stock in NCDEX warehouse reduced from 21 lakh sacks to 7.50 lakh sacks. 60 to 70% of Cocudakl’s stock in Gujarat is estimated to be weak quality stock. In Akola spot market, Cocudakl dropped by -2 Rupees to end at 2948.1 Rupees per 100 kgs.Technically market is under short covering as the market has witnessed a drop in open interest by -1.97% to settle at 39810 while prices are up 15 rupees, now Cocudakl is getting support at 2698 and below same could see a test of 2678 levels, and resistance is now likely to be seen at 2731, a move above could see prices testing 2744.

Trading Idea for the day

Cocudakl trading range for the day is 2693-2817.

Cocudakl prices gained as available stock is estimated to be very limited, the quality of which is also very weak.

Farmers in Pakistan stranded by unprecedented floods are running low on feed for their cattle.

Cottonseed exports are forecast down nearly 2 percent, while crush is projected to grow 3 percent.

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