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COTTON

Cotton yesterday settled up by 0.72% at 36130 as CAI has reduced its cotton crop estimate for the 2021- 22 season by 12.00 lakh bales to 348.13 lakh bales of 170 kgs each from its previous estimate of 360.13 lakh bales of 170 kgs each. The CAI has estimated cotton consumption for the months of October 2021 to December 2021 at 86.25 lakh bales of 170 kgs each (equivalent to 91.64 lakh running bales of 160 kgs each) while the export shipments upto 31st December 2021 are estimated by the CAI at 18.50 lakh bales of 170 kgs each (equivalent to 19.66 lakh running bales of 160 kgs each). 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. In spot market, Cotton gained by 170 Rupees to end at 35700 Rupees.Technically market is under short covering as market has witnessed drop in open interest by -11.05% to settled at 3846 while prices up 260 rupees, now Cotton is getting support at 35890 and below same could see a test of 35640 levels, and resistance is now likely to be seen at 36360, a move above could see prices testing 36580.

Trading Idea for the day

Cotton trading range for the day is 35970-37790.

Cotton prices gained as Gujarat’s cotton yield estimate drops to 92 lakh bales

CAI has reduced India’s cotton crop estimate for the 2021-22 season by 12 lakh bales to 348 lakh bales

CAI raised its cotton consumption estimate by 3% to 34.5 million bales for the current marketing year

COCUDAKL

Cocudakl yesterday settled up by 0.36% at 3322 tracking rise in cotton prices due to the demand in the international market and low yields this season. Support also seen amid expectations of firm demand, particularly from China and tight supplies. An urgency in obtaining the supplies and a buyout of cotton futures by hedge funds also supported the cotton market. Meanwhile, farmers in top producer India held on to production as heavy rains hit the quality of crop. Elsewhere, USDA in its latest report estimated 2021/22 global production to drop by 608,000 bales as lower production in the US and India offset increases for China, Australia and Pakistan. The 2021/22 global consumption forecast is virtually unchanged as a 500,000-bale decline in China’s cotton use is offset by gains for India, Mexico, and Pakistan. Global ending stocks for 2021/22 are down 726,000 bales this month. However, upside seen limited as the chances of re-emergence of the Covid through the Omicron variant is said to be having a global impact. 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 19.1 Rupees to end at 3386 Rupees per 100 kgs.Technically market is under short covering as market has witnessed drop in open interest by -0.4% to settled at 85220 while prices up 12 rupees, now Cocudakl is getting support at 3306 and below same could see a test of 3290 levels, and resistance is now likely to be seen at 3349, a move above could see prices testing 3376

Trading Idea for the day

Cocudakl trading range for the day is 3264-3366.

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 tracking rise in cotton prices due to the demand in the international market and low yields this season

Meanwhile, farmers in top producer India held on to production as heavy rains hit the quality of crop

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