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COTTON

Cotton yesterday settled down by -0.22% at 31960 as world cotton production for the 2021/22 season is poised for a full comeback from a disappointing 2020/21 season, led by the United States, the International Cotton Advisory Committee said in its annual report. It forecast 2021/22 output at 25.71 million tonnes, a 6.01% increase from 2020/21. However downside seen limited amid reports heavy rains in November damaged cotton crop over 44,200 ha cotton has been affected in Andhra Pradesh. USDA weekly export sales report showed net sales of 286,400 running bales, down 25% from the previous week but about 5% higher compared with the prior 4-week average. Increases were primarily for China. In its monthly balance sheet for November 2021, the CAI has estimated total cotton supply at 154.76 lakh bales of 170 kgs each, which consists of the arrivals of 77.76 lakh bales of 170 kgs each, imports of 2 lakh bales of 170 kgs each during the month of November 2021 and Opening Stock of 75 lakh bales of 170 kgs each at the beginning of the season on 1st October 2021. Further, the CAI has estimated cotton consumption for the months of October and November 2021 at 55.83 lakh bales of 170 kgs each while export shipment of cotton during the months of October and November 2021 is estimated at 7.00 lakh bales of 170 kgs each. In spot market, Cotton gained by 210 Rupees to end at 31940 Rupees.Technically market is under long liquidation as market has witnessed drop in open interest by -9.14% to settled at 3309 while prices down -70 rupees, now Cotton is getting support at 31750 and below same could see a test of 31530 levels, and resistance is now likely to be seen at 32300, a move above could see prices testing 32630.

Trading Idea for the day

Cotton trading range for the day is 31530-32630

Cotton dropped as world cotton production for the 2021/22 season is poised for a full comeback from a disappointing 2020/21 season

CAI pegs November cotton arrivals at 77 lakh bales

USDA weekly export sales report showed net sales of 286,400 running bales, down 25% from the previous week

COCUDAKL

Cocudakl yesterday settled down by -0.49% at 2864 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 gained by 31.95 Rupees to end at 2879.45 Rupees per 100 kgs.Technically market is under fresh selling as market has witnessed gain in open interest by 0.05% to settled at 78930 while prices down -14 rupees, now Cocudakl is getting support at 2835 and below same could see a test of 2807 levels, and resistance is now likely to be seen at 2907, a move above could see prices testing 2951.

Trading Idea for the day

Cocudakl trading range for the day is 2807-2951.

Cocudakl dropped 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 U.S. cotton 2021/22 supply and demand forecasts are largely unchanged this month, with only a slight increase in production.

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