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Cotton

Cotton yesterday settled down by -2.69% at 42400 amid concerns of weak demand after China adopted fresh covid curbs, adding to the already existing global slowdown concerns caused by the aggressive monetary tightening from central bankers. Meanwhile, the USDA slashed the world demand projections by 450 thousand bales in its June report, due to lower consumption from Mexico and Bangladesh, the two major producers of clothing. While on the supply side, it revised higher its production estimates to 121.2 million bales in the next harvest season. Cotton sowing dropped by nearly -0.18% to 84.6 lakh hectares in 2022 against an area sown of 84.75 lakh hectares in 2021. Cotton sowing in Gujarat fall by nearly -6% with 1,556,683 hectares against sown area of 2021 which was 1,650,463 hectares. Cotton sowing in Rajasthan witnessed a gain of 8.11% with 598.14 thousand hectares as against 553.26 thousand hectares on the same day last year. India has extended deadline to import cotton without paying import taxes until Oct. 31 from the earlier cut-off date of Sept. 30, the government said in a notification, as the sowing of the fibre crop delayed in some regions due to patchy monsoon rainfall. In spot market, Cotton gained by 230 Rupees to end at 42630 Rupees.Technically market is under long liquidation as market has witnessed drop in open interest by -11.53% to settled at 1312 while prices down - 1170 rupees, now Cotton is getting support at 41710 and below same could see a test of 41030 levels, and resistance is now likely to be seen at 43660, a move above could see prices testing 44930.

Trading Idea for the day

Cotton trading range for the day is 41030-44930.

Cotton dropped amid concerns of weak demand after China adopted fresh Covid curbs, adding to the already existing global slowdown concerns.

The USDA slashed the world demand projections by 450 thousand bales, due to lower consumption from Mexico and Bangladesh.

Cotton sowing dropped by nearly -0.18% to 84.6 lakh hectares in 2022 against an area sown of 84.75 lakh hectares in 2021.

Cocudakl

Cocudakl yesterday settled up by 2.26% at 2620 on low level buying after prices dropped 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 gained by 27.1 Rupees to end at 2729.65 Rupees per 100 kgs.Technically market is under fresh buying as market has witnessed gain in open interest by 6.4% to settled at 54670 while prices up 58 rupees, now Cocudakl is getting support at 2562 and below same could see a test of 2503 levels, and resistance is now likely to be seen at 2660, a move above could see prices testing 2699.

Trading Idea for the day

Cocudakl trading range for the day is 2503-2699.

Cocudakl gained on low level buying after prices dropped 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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