IGI Logo

Cotton

Cotton yesterday settled down by -0.05% at 40950 on profit booking after prices rose to all time high amid strong demand and possible lower supplies. Atul Ganatra, president of Cotton Association of India said that demand in local mills is good and new spinning mills are coming up. Demand is good but the profit that spinning mills were earnings has been reduced and now they will be at par or there will be a loss to the spinning mills at a high rate of cotton. Due to high rate of cotton, sowing likely to increase 15-20 percent in the season. USDA’s weekly export sales data showed that cotton shipments reached 96% of the USDA’s marketing year estimates to 371,400 bales, which is also 5% more than that of the previous week and 34% higher from the prior 4-week average. At the same time, concerns grew over the drought conditions in West Texas on the back of lower than normal precipitation forecasts for the area. Also, USDA in its March 10th report estimated 2021/22 global cotton consumption to be 111,000 bales higher compared to last month’s projections while it sees world ending stocks 1.7 million bales lower due to smaller global production, particularly from India. Cotton production at 340.63 lakh bales for this season (October 2021-September 2022) against 352.48 lakh bales last season, as per second advance estimate, the Union Ministry for Agriculture and Farmers Welfare. In spot market, Cotton gained by 310 Rupees to end at 40520 Rupees.Technically market is under fresh selling as market has witnessed gain in open interest by 4.8% to settled at 5591 while prices down -20 rupees, now Cotton is getting support at 40560 and below same could see a test of 40170 levels, and resistance is now likely to be seen at 41240, a move above could see prices testing 41530.

Trading Idea for the day

Cotton trading range for the day is 40170-41530.

Cotton dropped on profit booking after prices rose to all time high amid strong demand and possible lower supplies.

CAI said that demand in local mills is good and new spinning mills are coming up.

Due to high rate of cotton, sowing likely to increase 15-20 percent in the season.

Cocudakl

Cocudakl yesterday settled down by -0.51% at 3286 on profit booking after prices gained 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 gained by 7.7 Rupees to end at 3356.85 Rupees per 100 kgs.Technically market is under long liquidation as market has witnessed drop in open interest by -4.45% to settled at 93210 while prices down -17 rupees, now Cocudakl is getting support at 3256 and below same could see a test of 3225 levels, and resistance is now likely to be seen at 3317, a move above could see prices testing 3347

Trading Idea for the day

Cocudakl trading range for the day is 3225-3347

Cocudakl dropped on profit booking after prices 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

To Read Complete Report & Disclaimer Click Here

Views express by all participants are for information & academic purpose only. Kindly read disclaimer before referring below views. Click Here For Disclaimer