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COTTON

Cotton yesterday settled down by -0.38% at 31210 as arrivals of cotton were at 177,500 bales, higher than 5,500 bales against 172,000 bales previous day. India's cotton exports in the ongoing 2021-22 (Oct-Sep) marketing year have slowed due to higher prices in the domestic market, making overseas sales economically unviable. In the ongoing marketing year, around 800,000 bales of cotton were exported till November, sharply lower than the previous year. In 2020- 21, India had shipped 1.2-1.3 mln bales during Oct-Nov, trade officials said. Of the total quantity, around 12,000 bales arrived in Haryana, 3,000 in Punjab, and 18,500 bales in Rajasthan. Arrivals were pegged at 45,000 bales in Gujarat, around 13,000 bales in Madhya Pradesh, and 40,000 bales in Maharashtra. Nearly 13,000 bales arrived in Karnataka, 3,000 in Odisha, and 30,000 bales in Telangana and Andhra Pradesh combined. The United States Department of Agriculture (USDA) in its monthly supply and demand report lowered global ending stock estimates for the 2021/2022 crop year. "Projected 2021/22 world cotton ending stocks are 1.2 million bales lower this month due to lower beginning stocks, lower production, and slightly higher consumption," the USDA said in its December World Agricultural Supply and Demand Estimates (WASDE) report. In spot market, Cotton dropped by -70 Rupees to end at 31610 Rupees.Technically market is under long liquidation as market has witnessed drop in open interest by -5.19% to settled at 4166 while prices down -120 rupees, now Cotton is getting support at 31130 and below same could see a test of 31060 levels, and resistance is now likely to be seen at 31300, a move above could see prices testing 31400.

Technical Chart

Trading Range

Cotton trading range for the day is 31060-31400.

Cotton prices dropped as arrivals of cotton were at 177,500 bales and exports have slowed due to higher prices in the domestic market

Cotton exports down on high local prices, 800,000 bales shipped so far

Brazil 2021/2022 cotton (lint) output seen at 2.612 million tns versus 2.653 million tns in the previous forecast

COCUDAKL

Cocudakl yesterday settled up by 0.62% at 2776 amid tight supplies owing to higher input costs with rising global demand. However, upside seen limited as the chances of re-emergence of the Covid through the Omicron variant is said to be having a global impact. The global cotton balance sheets for 2021/22 include higher production and consumption, and slightly lower ending stocks. The projected global consumption is up 700,000 bales. The world production forecast is 1.5 million bales higher as gains for Brazil, Australia, Pakistan, and the United States more than offset a 200,000- bale decline in Greece following unusually heavy October rainfall. World ending stocks are projected at 86.9 million bales, 200,000 bales lower than in October, and 2.4 million bales lower than in 2020/21. The broader-based view for cotton is therefore positive from a pricing perspective, which implies that cotton cake prices shall tend to remain in an upward trend in forthcoming weeks. Dairy prices rose at the global auction, surpassing their March peak to touch a fresh seven-year high, as tight milk supply underpins demand for New Zealand’s biggest export commodity. The Global Dairy Trade price index increased 1.4 per cent at the latest auction, to touch its highest level since March 2014. The index has been on a march higher since August. In Akola spot market, Cocudakl dropped by -10.7 Rupees to end at 2800 Rupees per 100 kgs.Technically market is under fresh buying as market has witnessed gain in open interest by 6.74% to settled at 67330 while prices up 17 rupees, now Cocudakl is getting support at 2740 and below same could see a test of 2705 levels, and resistance is now likely to be seen at 2797, a move above could see prices testing 2819.

Technical Chart

Trading Range

Cocudakl trading range for the day is 2705-2819.

Cocudakl prices gained amid tight supplies owing to higher input costs with rising global demand.

Projected 2021/22 world cotton ending stocks are 1.2 million bales lower, due to lower beginning stocks, lower production, and slightly higher consumption

The U.S. cotton 2021/22 supply and demand forecasts are largely unchanged this month, with only a slight increase in production.

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