Cotton trading range for the day is 36010-37730 - Kedia Advisory
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Cotton
Cotton yesterday settled up by 0.73% at 37070 amid low cotton yield this season due to excessive rain and pink bollworm attack has resulted in the crop selling at over 60 per cent higher than the minimum support price (MSP). Production of Cotton is estimated at 34.06 million bales (each of 170 kg) is higher by 1.12 million bales than the average cotton production of 32.95 million bales, as per 2nd Advance Estimates for 2021-22. India’s cotton production for the crop year 2021-2022 is estimated at 27million 480- Pound Bales versus USDA’s January estimate of 27.5million 480-pound bales and 2020- 21’s production of 27.6 480-pound bales. India’s ending stocks are estimated at 9.84million 480-pound bales for 2021-22, the lowest level in the 3-Year, versus 13.44 million 480- pound bales in 2020-2021 and 16.18 million 480- pound bales in 2019-20. The Cotton Association of India has reduced its cotton crop estimate for the 2021-22 season by 12.00 lakh bales to 34.8 million bales of 170 kgs from its previous estimate of 36 million bales of 170 kgs. As per USDA February report, the world-ending stock will fall further to 84.31million 480-pound bales, the lowest level in 3-Year, from their January’s forecast of 85.01million 480-pound bales and 2020-21’s Ending Stock of 88.41million 480-pound bales. In spot market, Cotton dropped by -100 Rupees to end at 37110 Rupees.Technically market is under short covering as market has witnessed drop in open interest by -17.69% to settled at 842 while prices up 270 rupees, now Cotton is getting support at 36540 and below same could see a test of 36010 levels, and resistance is now likely to be seen at 37400, a move above could see prices testing 37730.
Trading Idea for the day
Cotton trading range for the day is 36010-37730
Cotton gained amid low cotton yield this season due to excessive rain and pink bollworm attack
Domestic cotton production has fallen for a third consecutive year in 2021-22
Domestic ending stocks will fall 26.8% in 2021-22 to a 3-Year low
Cocudakl
Cocudakl yesterday settled down by -0.55% at 3080 on profit booking after prices seen supported amid improved demand for raw cotton in the market mainly from spinning and ginning mills. As per estimate, cotton production in Gujarat is expected to be lower in 2021-22 season because of lesser sown area around 22.53 lakh hectares as compared to 25.53 lakh hectares in the previous 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. 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. In Akola spot market, Cocudakl dropped by -14.25 Rupees to end at 3262.5 Rupees per 100 kgs.Technically market is under long liquidation as market has witnessed drop in open interest by -7.8% to settled at while prices down -17 rupees, now Cocudakl is getting support at 3027 and below same could see a test of 2975 levels, and resistance is now likely to be seen at 3124, a move above could see prices testing 3169.
Trading Idea for the day
Cocudakl trading range for the day is 2975-3169
Cocudakl dropped on profit booking after prices seen supported amid improved demand for raw cotton inmainly from spinning mills
Farmers in top producer India held on to production as heavy rains hit the quality of crop.
As per estimate, cotton production in Gujarat is expected to be lower in 2021- 22 season because of lesser sown area around 22.53 lakh hectares.
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