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Cotton

Cotton yesterday settled up by 0.45% at 37720 amid increase in demand due to higher consumption, increased exports from India along with minimal opening stock. Tamil Nadu's total area under the crop in 2021-22 is 0.74 lakh hectares which is 33 per cent lesser than the previous year and production is 1.61 lakh bales which is 35 per cent lesser than the previous year. The International Cotton Advisory Committee has estimated the global cotton consumption to rise about 25.63 million tonnes for 2021-22, which is five percent higher than 2020-21. As per USDA reports, China and India together are expected to account for more than half of the global cotton crop in 2021-22, as the world cotton production is projected at 26.5 million tonnes, six per cent higher than 2020-21. As per the estimates of Cotton Association of India, cotton consumption in India is expected to be increased to 345 lakh bales, which is 2.8 per cent increase over the last year. Cotton production is estimated to be 360 lakh bales (1 bale of 170 kg) in India during 2021-22 and India's cotton export is estimated at 48 lakh bales against 78 lakh bales estimated in 2020-21 year. According to CAI, India's cotton imports during 2021-22 will increase by five lakh bales to 15 lakh bales. In spot market, Cotton dropped by -40 Rupees to end at 37740 Rupees.Technically market is under short covering as market has witnessed drop in open interest by - 5.83% to settled at 4636 while prices up 170 rupees, now Cotton is getting support at 37530 and below same could see a test of 37350 levels, and resistance is now likely to be seen at 37840, a move above could see prices testing 37970.

Trading Idea for the day

Cotton trading range for the day is 37350-37970.

Cotton prices rose amid increase in demand due to higher consumption, increased exports from India along with minimal opening stock.

ICAC has estimated the global cotton consumption to rise about 25.63 million tonnes for 2021-22, which is five percent higher than 2020-21.

Cotton consumption in India is expected to be increased to 345 lakh bales, which is 2.8 per cent increase over the last year.

Cocudakl

Cocudakl yesterday settled up by 1.37% at 3248 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 -8.6 Rupees to end at 3291.45 Rupees per 100 kgs.Technically market is under fresh buying as market has witnessed gain in open interest by 2.61% to settled at while prices up 44 rupees, now Cocudakl is getting support at 3209 and below same could see a test of 3170 levels, and resistance is now likely to be seen at 3272, a move above could see prices testing 3296.

Trading Idea for the day

Cocudakl trading range for the day is 3170-3296

Cocudakl prices gained amid improved demand for raw cotton in the market mainly from spinning and ginning mills

Farmers in top producer India held on to production as heavy rains hit the quality of crop. Cotton consumption in India is expected to be increased to 345 lakh bales, which is 2.8 per cent increase over the last year.

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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