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Cotton

Cotton yesterday settled down by -0.81% at 38050 on profit booking after prices gained lifted by expectations of strong demand for the natural fiber from top consumer China. China's state planner said it had issued a 400,000 tonnes quota for cotton imports with a sliding tariff rate. The U.S. Department of Agriculture's weekly export sales report showed net sales rose 2% from the previous week and 51% from the prior four-week average. World cotton stocks were trimmed 1.74 MMT to 84.31 MMT, the lowest in a 3-Year due to a lighter production forecast from India, from January’s forecast of 85.01million 480-pound bales and 2020-21’s Ending Stock of 88.41million 480-pound bales. The world stocks-to-use was figured at 66.3%, compared to 67.7% last month. India cotton production has fallen for a third consecutive year and is estimated at 26.5 million 480-Pound Bales for the crop year 2021-22 versus USDA’s January 2022 estimate of 27.5 million 480-pound bales and 2020-21’s production of 27.6 480-pound bales. India cotton ending stocks will fall by -40.18% to a 3-Year low at 8.04 million 480-pound bales for 2021- 22, 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 5.00 lakh bales to 34.3 million bales from its previous estimate of 34.8 million bales. In spot market, Cotton gained by 620 Rupees to end at 37980 Rupees.Technically market is under long liquidation as market has witnessed drop in open interest by -7.34% to settled at 6035 while prices down -310 rupees, now Cotton is getting support at 37780 and below same could see a test of 37500 levels, and resistance is now likely to be seen at 38410, a move above could see prices testing 38760.

Trading Idea for the day

Cotton trading range for the day is 37500-38760.

Cotton dropped on profit booking after prices gained lifted by expectations of strong demand for the natural fiber from top consumer China

China's state planner said it had issued a 400,000 tonnes quota for cotton imports with a sliding tariff rate

World cotton stocks were trimmed 1.74 MMT to 84.31 MMT, the lowest in a 3-Year due to a lighter production forecast from India

Cocudakl

Cocudakl yesterday settled down by -0.06% at 3155 on profit booking after seen supported on fears of a shortfall in production and higher demand for export. CAI in its latest report has reduced its cotton production by 5.00 lakh bales to 343.13 lakh bales (1 bale of 170 kg) for 2021-22. Consumption also declined by 5 lakh bales to 340 lakh bales, while export and import figures remain unchanged at 15-45 lakh bales respectively. The government has estimated the production of cotton under the second advance estimate for the year 2021-22 at 340 lakh bales as against 362 lakh bales in the first estimate. The USDA in its monthly report has cut India's cotton production to 27.5 million bales from 28 million bales last month, while the US, the largest exporter, cut cotton production by 3.61% to 17.6 million bales. 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. In Akola spot market, Cocudakl dropped by - 7.35 Rupees to end at 3280.85 Rupees per 100 kgs.Technically market is under fresh selling as market has witnessed gain in open interest by 2.14% to settled at 103200 while prices down -2 rupees, now Cocudakl is getting support at 3130 and below same could see a test of 3106 levels, and resistance is now likely to be seen at 3185, a move above could see prices testing 3216.

Trading Idea for the day

Cocudakl trading range for the day is 3106-3216.

Cocudakl dropped on profit booking after seen supported on fears of a shortfall in production and higher demand for export.

CAI in its latest report has reduced its cotton production by 5.00 lakh bales to 343.13 lakh bales for 2021-22.

The USDA in its monthly report has cut India's cotton production to 27.5 million bales from 28 million bales last month

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