IGI Logo

Cotton

Cotton yesterday settled up by 0.98% at 44480 due to concerns over production, slow arrivals, better domestic and exports demand. Domestic cotton arrivals down 25% or 88.95 lakh bales so far this season to around 238 lakh bales compared to last year. As per USDA report, all cotton planted area for coming season (2022) is estimated at 12.2 million acres, up 9 percent from last year. In its latest Apr report, the USDA increase global cotton production forecast in 2021-22 to 120.2 million bales (1 US bale= 218kg), compared to 119.9 million bales in Feb 2022. India’s crop is being unchanged at 26.50 million bales. India allowed dutyfree imports of cotton until Sept. 30 as prices in the local market jumped to a record high because of a drop in the production, the government said in a notification. The world's biggest producer of the fibre also removed the Agriculture Infrastructure and Development Cess (AIDC) on the imports, the government said. The total import taxes on cotton was earlier 11%, said Atul Ganatra, president of the Cotton Association of India (CAI). Duty-free imports will help textile mills, which could import around 2.5 million bales of cotton in the 2021/22 marketing year ending on Sept. 30, Ganatra said. In spot market, Cotton gained by 390 Rupees to end at 45010 Rupees.Technically market is under short covering as market has witnessed drop in open interest by -9.29% to settled at 3780 while prices up 430 rupees, now Cotton is getting support at 44340 and below same could see a test of 44210 levels, and resistance is now likely to be seen at 44650, a move above could see prices testing 44830.

Trading Idea for the day

Cotton trading range for the day is 44210-44830.

Cotton gained due to concerns over production, slow arrivals, better domestic and exports demand.

India allowed duty-free imports of cotton until Sept. 30 as prices in the local market jumped to a record high because of a drop in the production.

India's cotton output is likely to fall to 33.51 million bales in the current year from last year's 35.3 million bales, estimates CAI.

Cocudakl

Cocudakl yesterday settled up by 0.03% at 3079 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 9.55 Rupees to end at 3259.55 Rupees per 100 kgs.Technically market is under short covering as market has witnessed drop in open interest by -1.05% to settled at 132310 while prices up 1 rupees, now Cocudakl is getting support at 3057 and below same could see a test of 3034 levels, and resistance is now likely to be seen at 3106, a move above could see prices testing 3132.

Trading Idea for the day

Cocudakl trading range for the day is 3034-3132.

Cocudakl 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