Cotton trading range for the day is 40750-43750 - Kedia Advisory
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Cotton
Cotton yesterday settled up by 2.64% at 42440 after Reports of severe damage to crop due to heavy rains in Gujarat in the last 4 days, most of the sowings have failed. In Punjab, area under cotton cultivation dips to lowest since 2010, also Cotton crop in Punjab is on radar for second straight year as attack of whitefly, pink bollworm seen, as per the report. Spinning Mills Unit is setting up its plant, due to which cotton consumption is increasing continuously. China has decided to buy three to five lac tonnes of cotton from international markets for its state reserves. The U.S. 2022/23 cotton projections show lower production, exports, and ending stocks compared with last month. At 2.4 million bales, 2022/23 U.S. ending stocks are now expected to be 1 million bales lower than in 2021/22. According to Atul Ganatra, president of the Cotton Association of India, at least 10% higher sowing is expected compared to previous kharif season’s 12 million hectares. Looking at the current trend, cotton sowing in Maharashtra is expected to cross 4.2 million hectares. In Gujarat, it would be around 2.7 million hectares. The cotton acreage in north will be around 1.5 million hectares and the same for southern states is likely to remain at around 3.5-4.0 million hectare. In spot market, Cotton dropped by -350 Rupees to end at 41300 Rupees.Technically market is under short covering as market has witnessed drop in open interest by -0.49% to settled at 1210 while prices up 1090 rupees, now Cotton is getting support at 41600 and below same could see a test of 40750 levels, and resistance is now likely to be seen at 43100, a move above could see prices testing 43750.
Trading Idea for the day
Cotton trading range for the day is 40750-43750.
Cotton gains after reports of severe damage to crop due to heavy rains in Gujarat in the last 4 days, most of the sowings have failed.
India’s Cotton sowing gained by nearly 6.44% to 102.8 lakh hectares in 2022 against an area sown of 96.58 lakh hectares in 2021.
China has decided to buy three to five lac tonnes of cotton from international markets for its state reserves.
Cocudakl
Cocudakl yesterday settled down by -3.11% at 2521 as demand for animal feed commodities has become very weak due to the increase in availability of green fodder. Pressure also seen as price of other cattle feeds being lower than the price of cottonseed oilcake, all the consumers have created a mindset to shift towards other cattle feeds. Global cottonseed production is projected at 44.1 million tons, up 3 percent, with gains in China, India, Turkey, and Uzbekistan. Cottonseed exports are forecast down nearly 2 percent, while crush is projected to grow 3 percent. Cottonseed oil trade is forecast to decline on lower export projections for the United States due to higher domestic demand. The new season for cotton is expected to be good. Retailer expects slight decline in dairy demand as supply uncertainties remain. Further pressure seen as Dairy farmers have demanded a hike in milk price in the midst of rising production cost, and the government has convened a meeting of farmers and farmers’ representatives in Thiruvananthapuram on May 10. Milk procurement prices have been rising, prompting higher revenues for dairy companies but also leading to pressure on margins in FY2023-24, according to a report. The new season for cotton is expected to be good for farmers as the market price of the fiber is currently more than MSP. In Akola spot market, Cocudakl dropped by -12.45 Rupees to end at 2739.1 Rupees per 100 kgs.Technically market is under fresh selling as market has witnessed gain in open interest by 2.41% to settled at 58970 while prices down -81 rupees, now Cocudakl is getting support at 2480 and below same could see a test of 2440 levels, and resistance is now likely to be seen at 2592, a move above could see prices testing 2664.
Trading Idea for the day
Cocudakl trading range for the day is 2440-2664.
Cocudakl seen pressure as demand for animal feed commodities has become very weak
Global cottonseed production is projected at 44.1 million tons, up 3 percent
Cottonseed exports are forecast down nearly 2 percent, while crush is projected to grow 3 percent.
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