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Cotton

Cotton yesterday settled up by 0.23% at 48410 amid rising demand and possible lower supplies. The USDA in its latest report lowered U.S. production by one million bales as the drought situation in Texas is predicted to reduce harvested acres. At the same time, global supplies in 2022/23 are projected below a year earlier, as smaller beginning stocks more than offset a 2.6-million-bale increase in production, with consumption and ending stocks also lower. The Telangana government is likely to encourage the cultivation of cotton crop on large scale this kharif in the state in general and erstwhile Adilabad district in particular following huge demand for Telangana’s cotton in the international market and good price for cotton. The involvement of the state government in commercial operations of cotton production is minimal unlike paddy, pulses and maize and jowar. The area under cotton is seen expanding in North India during the current kharif season, mainly in Haryana and Rajasthan. The trade expects the area to increase by 10-15 per cent. Seed firms say acreage may not rise as growers face water, weather problems. In spot market, Cotton dropped by -620 Rupees to end at 49460 Rupees.Technically market is under short covering as market has witnessed drop in open interest by -7.35% to settled at 1462 while prices up 110 rupees, now Cotton is getting support at 47950 and below same could see a test of 47490 levels, and resistance is now likely to be seen at 48670, a move above could see prices testing 48930

Trading Idea for the day

Cotton trading range for the day is 47490-48930

Cotton prices recovered to end with gains amid rising demand and possible lower supplies

The USDA in its latest report lowered U.S. production by one million bales

The Telangana government is likely to encourage the cultivation of cotton crop on large scale this kharif

Cocudakl

Cocudakl yesterday settled up by 1.14% at 2829 on low level buying after prices dropped as 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. Pressure seen in cotton also amid expectations of higher supply from the US and lower global demand. In its latest April report, the USDA increased the global cotton production forecast in 2021-22 to 120.2 million bales, compared to 119.9 million bales in Feb 2022. In Akola spot market, Cocudakl gained by 14.95 Rupees to end at 3052.45 Rupees per 100 kgs.Technically market is under short covering as market has witnessed drop in open interest by -1.68% to settled at while prices up 32 rupees, now Cocudakl is getting support at 2785 and below same could see a test of 2740 levels, and resistance is now likely to be seen at 2856, a move above could see prices testing 2882.

Trading Idea for the day

Cocudakl trading range for the day is 2740-2882.

Cocudakl recovered on low level buying after prices dropped as 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.

Cottonseed oil trade is forecast to decline on lower export projections for the United States due to higher domestic demand.

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