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Cotton

Cotton yesterday settled down by -1.84% at 28280 on profit bookinga after prices gained because of threat regarding significant crop damage in the affected areas, in addition to possibility of harvest delays. The pink bollworm attack has been discovered in Bathinda district’s cotton farms in Punjab. The harvest in Punjab shall begin by next week. The recent developments regarding pink bollworm infestations in Punjab, Haryana and heavy rains in Madhya Pradesh and Maharashtra have started raising doubts regarding this season’s crop size. In earlier forecasts, the US Department of Agriculture (USDA) and the Cotton Corporation of India (CCI) have come out with a better harvest versus previous year. Cotton is grown around 4.8 lakh hectares in the state of Punjab. Reports say that Sirsa, Fatehabad, Hisar, Mahendragarh, and Jind in Haryana, and Bathinda and Mansa in Punjab, are some of the districts affected by the pink bollworm infestation. The regions of Maharashtra and Madhya Pradesh are also reportedly affected adversely, from the heavy rains across the respective productive belts. The Haryana government directed all deputy commissioners to send reports regarding the recent damage to cotton crop due to heavy rains and waterlogging by October 15. In spot market, Cotton dropped by -70 Rupees to end at 27440 Rupees.Technically market is under fresh selling as market has witnessed gain in open interest by 2.14% to settled at 2194 while prices down -530 rupees, now Cotton is getting support at 27830 and below same could see a test of 27370 levels, and resistance is now likely to be seen at 28790, a move above could see prices testing 29290

Trading Idea for the day

Cotton trading range for the day is 30010-32010.

Cotton prices gained on the back of supply concerns and growing demand from top user China, which is filling needs mainly from the US and India.

Meanwhile, heavy rains are threatening crops in US growing regions, while a pest called pink bollworm is rapidly spreading across fields.

Unseasonal rains in growing areas are proving to be a blessing in disguise as they might help cotton farmers go in for third and fourth picking.

Cocudakl

Cocudakl yesterday settled down by -0.24% at 2476 as crop seems to be in good condition after Gujarat received very good rainfall from last few days. However downside seen limited amid tight supply situation in cottonseed is expected to continue in the coming months considering the stronger demand. 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. The U.S. Department of Agriculture forecast lower production and also cut ending stocks estimates for the 2021/22 marketing year in a monthly report. In its WASDE report, the USDA projected lower U.S. production, exports and ending stocks compared with July, as well as lower world 2021/22 ending stocks. 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. 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. In Akola spot market, Cocudakl dropped by -23.55 Rupees to end at 2780 Rupees per 100 kgs.Technically market is under fresh selling as market has witnessed gain in open interest by 1.98% to settled at while prices down -6 rupees, now Cocudakl is getting support at 2455 and below same could see a test of 2435 levels, and resistance is now likely to be seen at 2492, a move above could see prices testing 2509.

Trading Idea for the day

Cocudakl trading range for the day is 2508-2628.

Cocudakl dropped as crop seems to be in good condition after Gujarat received very good rainfall from last few days

However downside seen limited amid tight supply situation in cottonseed is expected to continue in the coming months considering the stronger demand.

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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