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COTTON

Cotton yesterday settled down by -0.29% at 31330 as India's cotton exports in the ongoing 2021-22 (Oct-Sep) marketing year have slowed due to higher prices in the domestic market, making overseas sales economically unviable. In the ongoing marketing year, around 800,000 bales of cotton were exported till November, sharply lower than the previous year. In 2020-21, India had shipped 1.2-1.3 mln bales during OctNov, trade officials said. In the current season, most of the consignments have been shipped to Bangladesh followed by China, Indonesia and Vietnam. Of the total quantity, 500,000-550,000 bales were shipped to Bangladesh, they said. Supply chain bottlenecks and the emergence of the Omicron variant may affect consumer buying. Cotton prices are expected to soften from their peak levels of around ₹8,000-8,800 a quintal (raw cotton) as the arrivals gain momentum said CAI. Acknowledging that the cotton arrivals in India have been delayed partly due to the unseasonal rains and other factors, Atul Ganatra, President, CAI, stated that "cotton prices in India will fall once the arrivals pick up." Countries like Vietnam and Bangladesh have also increased textile manufacturing and their demand for cotton. In spot market, Cotton gained by 60 Rupees to end at 31680 Rupees.Technically market is under long liquidation as market has witnessed drop in open interest by -3.6% to settled at 4394 while prices down -90 rupees, now Cotton is getting support at 31100 and below same could see a test of 30870 levels, and resistance is now likely to be seen at 31570, a move above could see prices testing 31810

Technical Chart

Trading Range

Cotton trading range for the day is 30870-31810

Cotton prices dropped as Cotton exports dropped on high local prices, 800,000 bales shipped so far

Cotton prices soften from their peak levels as the arrivals gain momentum said CAI.

Domestic consumption for 2021-22 is estimated at 33.5 mln bales

COCUDAKL

Cocudakl yesterday settled down by -1.33% at 2737 on profit booking as the chances of re-emergence of the Covid through the Omicron variant is said to be having a global impact. However, downside seen limited amid tight supplies owing to higher input costs with rising global demand. The global cotton balance sheets for 2021/22 include higher production and consumption, and slightly lower ending stocks. The projected global consumption is up 700,000 bales. The world production forecast is 1.5 million bales higher as gains for Brazil, Australia, Pakistan, and the United States more than offset a 200,000- bale decline in Greece following unusually heavy October rainfall. World ending stocks are projected at 86.9 million bales, 200,000 bales lower than in October, and 2.4 million bales lower than in 2020/21. The broader-based view for cotton is therefore positive from a pricing perspective, which implies that cotton cake prices shall tend to remain in an upward trend in forthcoming weeks. Dairy prices rose at the global auction, surpassing their March peak to touch a fresh seven-year high, as tight milk supply underpins demand for New Zealand’s biggest export commodity. The Global Dairy Trade price index increased 1.4 per cent at the latest auction, to touch its highest level since March 2014. The index has been on a march higher since August. In Akola spot market, Cocudakl dropped by -25 Rupees to end at 2810.7 Rupees per 100 kgs.Technically market is under long liquidation as market has witnessed drop in open interest by - 16.98% to settled at while prices down -37 rupees, now Cocudakl is getting support at 2713 and below same could see a test of 2688 levels, and resistance is now likely to be seen at 2778, a move above could see prices testing 2818.

Technical Chart

Trading Range

Cocudakl trading range for the day is 2688-2818

Cocudakl dropped on profit booking as the chances of re-emergence of the Covid through the Omicron variant is said to be having a global impact.

However, downside seen limited amid tight supplies owing to higher input costs with rising global demand

The global cotton balance sheets for 2021/22 include higher production and consumption, and slightly lower ending stocks.

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