Cotton yesterday settled up by 0.92% at 31800 in anticipation of a possible fall in production - Kedia Advisory
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COTTON
Cotton yesterday settled up by 0.92% at 31800 in anticipation of a possible fall in production, and the remaining cotton stock is also low, while import demand from China remains high. China will start a new round of sales from its cotton reserves, with a total 600,000 tonnes of imported and domestic cotton to be sold off in daily auctions, according to an official notice. It is the second batch of cotton to be released from reserves this year and is designed to better meet demand for the fibre from spinning companies. However downside seen limited bolstered by strong demand from both the domestic textile sector and export markets over the last year, and high global prices. Both production estimates for the 2021/22 crop year and ending stocks in the U.S. were largely unchanged at 18.20 million bales and 3.40 million bales respectively, the USDA said in its November World Agricultural Supply and Demand Estimates (WASDE) report. India’s cotton production in 2021-22 season is likely to be 360.13 lakh bales of 170 kg each (equivalent to 382.64 lakh running bales of 160 kg each), which is more by 7.13 lakh bales than the previous season’s crop of 353 lakh bales, the Cotton Association of India (CAI) has said in its first estimate for the new season beginning October 1, 2021. In spot market, Cotton dropped by -140 Rupees to end at 32040 Rupees.Technically market is under short covering as market has witnessed drop in open interest by -1.9% to settled at 1963 while prices up 290 rupees, now Cotton is getting support at 31420 and below same could see a test of 31040 levels, and resistance is now likely to be seen at 32020, a move above could see prices testing 32240.
Technical Chart
Trading Range
Cotton trading range for the day is 31040-32240
Cotton gained in anticipation of a possible fall in production, and the remaining cotton stock is also low, while import demand from China remains high
Support also amid strong demand from both the domestic textile sector and export markets
China starts new round of cotton sales to boost supply
COCUDAKL
Cocudakl yesterday settled up by 1.1% at 2485 amid rise in oilseed prices and due to increase in demand after Corona. Support also seen amid tight supplies owing to higher input costs with rising global demand. Cotton consumption is consistently on the rise due to increasing demand and mitigating impact of COVID-19 in India, Pakistan, Mexico and Bangladesh. Meanwhile the USDA in its latest monthly report estimated global production to go up due to better crop yields in Brazil, Australia and Pakistan. Elsewhere, it is reported that the US is looking to expand cotton exports to Bangladesh, the world’s second largest importer of cotton whereas in Pakistan, cotton arrivals to ginneries reached over 6.8 million bales, up 70% from a year earlier. The Cotton Association of India (CAI) estimated cotton output at 360.13 lakh bales for the crop year (OctoberSeptember) 2021-22, due to expectation of better yield. The total cotton production in the last season is estimated at 353 lakh bales, which is 7.13 lakh bales less than the current season, the CAI said in a statement. “The cotton yield is estimated to be excellent and the farmers are expected to go for the third and fourth pickings due to good availability of water following a good monsoon,” CAI president Atul Ganatra told PTI. In Akola spot market, Cocudakl dropped by - 13.5 Rupees to end at 2578.15 Rupees per 100 kgs.Technically market is under fresh buying as market has witnessed gain in open interest by 3.08% to settled at while prices up 27 rupees, now Cocudakl is getting support at 2461 and below same could see a test of 2438 levels, and resistance is now likely to be seen at 2501, a move above could see prices testing 2518.
Technical Chart
Trading Range
Cocudakl trading range for the day is 2438-2518.
Cocudakl prices remained supported amid rise in oilseed prices and due to increase in demand after Corona.
Support also seen amid tight supplies owing to higher input costs with rising global demand.
Cotton consumption is consistently on the rise due to increasing demand and mitigating impact of COVID-19 in India
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