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Cotton

Cotton yesterday settled up by 0.93% at 31500 helped by prospects of an improvement in demand from top consumer China. India’s domestic cotton demand for the 2022-23 season up to September is estimated to be lower by about 18 lakh bales (170 kg each) at 300 lakh bales or nearly 6 per cent less than last year’s 318 lakh bales. According to the Punjab Mandi Board data, cotton crop has seen the slowest arrival in the last five years even as the average rate is the highest since 2018. Punjab is expected to have produced 20 lakh quintals against 29 lakh quintals produced in the 2021-22 season. China's agriculture ministry lowered its outlook for cotton consumption, as slowing global economic growth continues to hurt demand for textiles. China's cotton consumption in the 2022/23 crop year that began in September is seen at 7.5 million tonnes, 200,000 tonnes lower than in last month's forecast, the ministry said in its monthly Chinese Agricultural Supply and Demand Estimates (CASDE) report. The latest US Department of Agriculture cotton projections for 2022/23 indicated a slight increase from 2021/22 for world cotton production and lower global demand estimates for 2022/2023. Production in the US, the world’s largest exporter of cotton, was seen about 1.5% higher, at 14.0 million bales, as a decrease in the Southwest is more than offset by increases elsewhere. In spot market, Cotton dropped by -30 Rupees to end at 31970 Rupees.Technically market is under short covering as the market has witnessed a drop in open interest by -2.9% to settle at 2344 while prices are up 290 rupees, now Cotton is getting support at 31280 and below same could see a test of 31060 levels, and resistance is now likely to be seen at 31660, a move above could see prices testing 31820.

Trading Idea for the day

Cotton trading range for the day is 31060-31820.

Cotton gains helped by prospects of an improvement in demand from top consumer China.

China cuts cotton demand outlook on slowing global growth

USDA cotton projections for 2022/23 indicated a slight increase from 2021/22 for world cotton

Cocudakl

Cocudakl yesterday settled up by 0.72% at 2660 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 gained by 13.75 Rupees to end at 2937.35 Rupees per 100 kgs.Technically market is under fresh buying as the market has witnessed a gain in open interest by 3.59% to settle at 34590 while prices are up 19 rupees, now Cocudakl is getting support at 2640 and below same could see a test of 2619 levels, and resistance is now likely to be seen at 2678, a move above could see prices testing 2695.

Trading Idea for the day

Cocudakl trading range for the day is 2619-2695.

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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