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Cotton

Cotton yesterday settled down by -1.18% at 32690 on profit booking as India’s cotton production in 2021-22 season is likely to be 360.13 lakh bales of 170 kg each (equivalent to 382.64 lakh running bales of 160 kg each), which is more by 7.13 lakh bales than the previous season’s crop of 353 lakh bales, the Cotton Association of India (CAI) has said in its first estimate for the new season beginning October 1, 2021. As per report, the loose cotton production figures for the 2020-21 crop year were less by 25 per cent at 5.45 lakh bales of 170 kg each, since the said crop year was a pandemic year. The preliminary yearly Balance Sheet projected by the CAI Crop Committee estimates total cotton supply till end of the 2021-22 Season i.e. upto September 30, 2022 at 445.13 lakh bales of 170 kg each, which consists of the opening stock of 75.00 lakh bales at the beginning of the season, crop for the season estimated at 360.13 lakh bales, and imports for the season estimated at the same level as in the last year i.e. at 10 lakh bales. Cotton exports could be lower at 50 lakh bales this season (October 2021-September 2022) compared with 75-80 lakh bales last season. In spot market, Cotton dropped by -20 Rupees to end at 32850 Rupees.Technically market is under fresh selling as market has witnessed gain in open interest by 0.45% to settled at 3331 while prices down -390 rupees, now Cotton is getting support at 32420 and below same could see a test of 32160 levels, and resistance is now likely to be seen at 33030, a move above could see prices testing 33380.

Technical Chart

Trading Range

Cotton trading range for the day is 32160-33380.

Cotton prices dropped on profit booking as India's cotton output to increase by 7.13 lakh bales this season

Cotton exports could be lower at 50 lakh bales this season compared with 75-80 lakh bales last season.

SIMA said cotton production this year is estimated to be 360 lakh bales

Cocudakl

Cocudakl yesterday settled down by -0.24% at 2536 as crop seems to be in good condition after Gujarat received very good rainfall. 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 -40 Rupees to end at 2750 Rupees per 100 kgs.Technically market is under fresh selling as market has witnessed gain in open interest by 0.06% to settled at 31750 while prices down -6 rupees, now Cocudakl is getting support at 2527 and below same could see a test of 2518 levels, and resistance is now likely to be seen at 2545, a move above could see prices testing 2554.

Technical Chart

Trading Range

Cocudakl trading range for the day is 2518-2554.

Cocudakl dropped as crop seems to be in good condition after Gujarat received very good rainfall.

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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