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Cotton

Cotton yesterday settled down by -0.16% at 31640 as 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. Arrivals are lower as farmers are holding cotton in anticipation of higher prices in the near term. India is likely to produce 34.4 million bales of cotton in the 2022/23 season that started on Oct. 1, up 12% from a year ago after farmers expanded the crop area. India’s cotton output for the season ended September 30, 2022, fell to 307.5 lakh bales (against 360.13 lakh bales estimated at the beginning of the season in October last year. This is the lowest since 2007-08, when the production was 307 lakh bales. 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. Meanwhile, global cotton consumption is projected to be 650,000 bales lower this month, with a 300,000-bale cut to mill use in Pakistan and Bangladesh. In spot market, Cotton dropped by -710 Rupees to end at 32180 Rupees.Technically market is under long liquidation as the market has witnessed a drop in open interest by -2.57% to settle at 2466 while prices are down -50 rupees, now Cotton is getting support at 31470 and below same could see a test of 31300 levels, and resistance is now likely to be seen at 31800, a move above could see prices testing 31960.

Trading Idea for the day

Cotton trading range for the day is 31300-31960

Cotton dropped as India’s domestic cotton demand for the 2022-23 season is estimated to be lower by about 18 lakh bales.

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

Punjab’s cotton crop has seen the slowest arrival in the last five years even as the average rate is the highest since 2018.

Cocudakl

Cocudakl yesterday settled up by 0.61% at 2658 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 -70.1 Rupees to end at 2990.05 Rupees per 100 kgs.Technically market is under short covering as the market has witnessed a drop in open interest by -3.82% to settle at 31490 while prices are up 16 rupees, now Cocudakl is getting support at 2643 and below same could see a test of 2629 levels, and resistance is now likely to be seen at 2671, a move above could see prices testing 2685

Trading Idea for the day

Cocudakl trading range for the day is 2629-2685.

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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