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COTTON

Cotton yesterday settled down by -0.11% at 35440 on profit booking after prices seen supported after the U.S. Department of Agriculture (USDA) lowered U.S. production and ending stocks estimates for the 2021/22 crop year, while a weaker dollar added to the upbeat mood. In its January World Agricultural Supply and Demand Estimates (WASDE) report, the USDA projected U.S. production at 17.62 million bales for the 2021/22 crop year, about 660,000 bales lower than the previous month, bringing its ending stock estimate 200,000 bales lower to 3.20 million bales. The USDA also cut its global output estimate by about 610,000 bales to 120.96 million bales, bringing ending stocks forecast to 85.01 million bales from 85.73 million bales last month. However, the agency trimmed U.S. exports estimate by 500,000 bales to 15.0 million bales, citing lower U.S. crop and continuing logistical issues. For marketing year (MY) 2021/2022, India’s cotton production forecasted at 27.7 million 480 lb bales on an area of 12.4 million hectares. Untimely rains during the Northeast Monsoon (October-December) along with pink bollworm infestation led to lower production in North India. Post estimates lower yields in Punjab and Haryana due to pink bollworm infestation (PBW) and untimely rains which has impacted the quality of the crop. Trade sources indicate that the grade is lower, and the color has deteriorated. In spot market, Cotton gained by 220 Rupees to end at 35480 Rupees.Technically market is under long liquidation as market has witnessed drop in open interest by - 6.63% to settled at 5256 while prices down -40 rupees, now Cotton is getting support at 35260 and below same could see a test of 35070 levels, and resistance is now likely to be seen at 35690, a move above could see prices testing 35930.

Trading Idea for the day

Cotton trading range for the day is 35070-35930.

Cotton dropped on profit booking after prices seen supported after the USDA lowered U.S. production and ending stocks estimates for the 2021/22 crop year

India’s cotton production forecasted at 27.7 million 480 lb bales on an area of 12.4 million hectares.

Untimely rains during the Northeast Monsoon (October-December) along with pink bollworm infestation led to lower production in North India.

COCUDAKL

Cocudakl yesterday settled down by -0.65% at 3347 as the chances of reemergence of the Covid through the Omicron variant is said to be having a global impact. However, downside seen limited after rains and hailstorm in few parts of Maharashtra. 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. In Akola spot market, Cocudakl gained by 0.15 Rupees to end at 3407.65 Rupees per 100 kgs.Technically market is under fresh selling as market has witnessed gain in open interest by 6.77% to settled at 82970 while prices down -22 rupees, now Cocudakl is getting support at 3322 and below same could see a test of 3298 levels, and resistance is now likely to be seen at 3385, a move above could see prices testing 3424.

Trading Idea for the day

Cocudakl trading range for the day is 3298-3424.

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 after rains and hailstorm in few parts of Maharashtra. 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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