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Gold

Gold yesterday settled flat at 47961 amid softer U.S. bond yields and the European Central Bank’s decision to keep policy unchanged as expected, which allayed investor fears of an imminent interest rate hike. Global demand for gold fell in the third quarter to its lowest since the last quarter of 2020 as financial investors sold the metal, the World Gold Council (WGC) said. Total demand for gold over July-September was 831 tonnes, down from 894.4 tonnes in the same period of last year and 1,084.9 tonnes in the third quarter of 2019, the WGC said in its latest quarterly report. India's gold demand could strengthen significantly in the fourth quarter, the World Gold Council (WGC) said, with a drop in global prices and the release of pent-up demand expected to lift jewellery sales during the peak festive season. Higher demand from the world's second-biggest gold consumer could help support spot prices after a near 5% correction so far this year, but a rise in imports of the metal would widen India's trade deficit and weigh on the rupee. China's gold consumption in the first nine months of 2021 rose 48.4% on the year to 813.59 tonnes, the China Gold Association said, as demand recovered from a pandemic-affected 2020. Technically market is under long liquidation as market has witnessed drop in open interest by -3.28% to settled at 10116 while prices remain unchanged -1 rupees, now Gold is getting support at 47729 and below same could see a test of 47496 levels, and resistance is now likely to be seen at 48212, a move above could see prices testing 48462.

Trading Ideas:

* Gold trading range for the day is 47496-48462.

* Gold settled flat softer U.S. bond yields and ECB’s decision to keep policy unchanged as expected

* Gold demand fell in the third quarter as big investors sold, says WGC

* India's gold demand could jump in Q4 on festivals, pent up purchases - WGC


Silver

Silver yesterday settled down by -0.36% at 64931 as traders digested a batch of economic data and interest rate decisions from major central banks. The US economy grew an annualized 2% in Q3, missing market expectations by 0.7 percentage points and slowing sharply from the 6.7% jump of the previous quarter, as high inflation curbed demand and soaring COVID-19 infections among the unvaccinated worsened labor shortages. Contracts to buy U.S. previously owned homes unexpectedly fell in September likely as some potential buyers delayed purchases amid higher prices. The National Association of Realtors (NAR) said its Pending Home Sales Index, based on signed contracts, decreased 2.3% last month to 116.7. Pending home sales fell in all four regions. The ECB left policy unchanged, holding fire before a set of crucial decisions in December on ending pandemic emergency stimulus and returning policy to a more normal setting. European Central Bank President Christine Lagarde pushed back against market bets that runaway inflation would force a rate hike as early as next year, reaffirming the view that price pressures would ease by then. With central banks elsewhere indicating they are heading down a path to tighter policy, Lagarde said the ECB Governing Council had done much “soul-searching” over its stance but concluded it was correct. Technically market is under fresh selling as market has witnessed gain in open interest by 2.88% to settled at 10244 while prices down -234 rupees, now Silver is getting support at 64625 and below same could see a test of 64319 levels, and resistance is now likely to be seen at 65292, a move above could see prices testing 65653.

Trading Ideas:

* Silver trading range for the day is 64319-65653.

* Silver prices dropped as traders digested a batch of economic data and interest rate decisions from major central banks.

* ECB's Lagarde pushes back on market rate-hike bets

* The ECB left policy unchanged, holding fire before a set of crucial decisions in December on ending pandemic emergency stimulus

 

Crude oil

Crude oil yesterday settled down by -0.58% at 6184 after Iran said talks with world powers on its nuclear programme would resume by the end of November and U.S. crude inventories rose by much more than expected. Iran's top nuclear negotiator Ali Bagheri Kani said the country's talks with six world powers to try to revive a 2015 nuclear deal will resume by the end of November. A deal could pave the way to lifting harsh sanctions imposed by former U.S. President Donald Trump on Iran's oil exports in late 2018. Crude stocks rose by 4.3 million barrels last week, the U.S. Energy Department said, more than double the 1.9 million barrel gain forecasted. Yet gasoline stocks fell by 2 million barrels to their lowest in nearly four years, even as U.S. consumers contend with rising pump prices. At the WTI delivery hub in Cushing, Oklahoma, crude storage is the most depleted for three years, with prices for longer-dated futures contracts indicating supplies will remain low for months. Outbreaks of coronavirus infections in China and record deaths and the threat of lockdowns in Russia, along with rising cases in western Europe, also weighed on prices. Technically market is under long liquidation as market has witnessed drop in open interest by -5.58% to settled at 5309 while prices down -36 rupees, now Crude oil is getting support at 6104 and below same could see a test of 6023 levels, and resistance is now likely to be seen at 6231, a move above could see prices testing 6277.

Trading Ideas:

* Crude oil trading range for the day is 6023-6277.

* Crude oil dropped after Iran said talks with world powers on its nuclear programme would resume by the end of November

* Pressure also seen as U.S. crude inventories rose by much more than expected.

* Outbreaks of coronavirus infections in China and record deaths and the threat of lockdowns in Russia, along with rising cases in western Europe, also weighed.


Nat.Gas

Nat.Gas yesterday settled down by -6.44% at 435.7 as domestic stockpiles built up a notch faster than expected and tracking a general decline in global prices after Russian President Vladimir Putin ordered Gazprom to start refilling its European gas-storage facilities from November 8th. The EIA weekly report showed an 87bcf addition of gas into storage last week, slightly above market forecasts of an 86bcf increase. Also, output in the US Lower 48 states has averaged 92.3 billion cubic feet per day so far in October, up from 91.1 bcfd in September, according to Refinitiv. Meanwhile, the amount of gas flowing to US LNG export plants has averaged 10.5 bcfd so far in October, up from 10.4 bcfd in September. US gas demand, including exports, is expected to rise to 92.7 bcfd next week from 90.7 bcfd this week as more homes and businesses turn on their heaters. Data provider Refinitiv said output in the U.S. Lower 48 states has averaged 92.3 billion cubic feet per day (bcfd) so far in October, up from 91.1 bcfd in September. That compares with a monthly record of 95.4 bcfd in November 2019. Technically market is under long liquidation as market has witnessed drop in open interest by -26.8% to settled at 4405 while prices down -30 rupees, now Natural gas is getting support at 422.3 and below same could see a test of 409 levels, and resistance is now likely to be seen at 457.1, a move above could see prices testing 478.6.

Trading Ideas:

* Natural gas trading range for the day is 409-478.6.

* Natural gas prices dropped as domestic stockpiles built up a notch faster than expected

* Russian President Vladimir Putin ordered Gazprom to start refilling its European gas-storage facilities from November 8th.

* The EIA weekly report showed an 87bcf addition of gas into storage last week
 

Copper

Copper yesterday settled up by 0.6% at 751.75 as LME copper stocks have maintained a downward trend since late September, while the proportion of cancelled warrants has gradually increased, up from 26.84% on September 22 to 61.60% on October 11. The proportion of cancelled warrants on October 15 has reached 92.2%, pushing the available inventory to the lowest level since 1974. The backwardation of LME cash to the three-month contract soared to above $1,100/mt, the highest since the 1970s. At the same time, the LME three-month copper rose rapidly, up from around $9,300/mt to a maximum of $10,452.5/mt, an increase of 12.4%. On the fundamentals, the easing power rationing in Guangdong and Jiangsu as well as the continuously falling copper prices have prompted the downstream sector to restock, and the orders from the terminal sector also picked up. The Canada central bank unexpectedly announced to end its QE policy, and indicated that the timing for interest rate hike has advanced. The Brazil central bank raised the interest rate by 150 base points, and another hike is likely to happen in December with the same increase. These have all sent out signals of more interest rate hikes by global central banks and a slowing economy. Technically market is under short covering as market has witnessed drop in open interest by -3.1% to settled at 4475 while prices up 4.5 rupees, now Copper is getting support at 745.9 and below same could see a test of 740.1 levels, and resistance is now likely to be seen at 756.8, a move above could see prices testing 761.9.

Trading Ideas:

* Copper trading range for the day is 740.1-761.9.

* Copper gains as LME copper stocks have maintained a downward trend since late September, while the proportion of cancelled warrants has gradually increased

* Chinese smelters to increase exports as short squeeze pushed LME copper prices higher

* UBS sees copper prices at $12,000/mt by end–Mar 2022, $11,500/mt by end-Dec 2022


Zinc

Zinc yesterday settled up by 1.16% at 283.4 as dollar seen pressure after GDP growth for the US came below forecasts at 2% and PCE prices increased faster than anticipated. Contracts to buy U.S. previously owned homes unexpectedly fell in September likely as some potential buyers delayed purchases amid higher prices. The National Association of Realtors (NAR) said its Pending Home Sales Index, based on signed contracts, decreased 2.3% last month to 116.7. The People’s Bank of China (PBOC) continued to inject a total CNY 200 billion of seven-day reverse repos at an interest rate of 2.2 percent on October 28th, the same as in the previous day, and marking the fourth straight day of injections in the financial system. The central bank said, the move aims to maintain the reasonable and sufficient liquidity of the banking system. As Europe’s largest refined zinc producer Nyrstar decided to cut output in the fourth quarter due to the soaring electricity prices in Europe and the significant increase in carbon emissions-related costs, the market concerns of inflation caused by the global energy crisis has risen sharply. And the sharp growth in the cost of industrial products will gradually be passed onto the prices. Technically market is under fresh buying as market has witnessed gain in open interest by 8.79% to settled at 1126 while prices up 3.25 rupees, now Zinc is getting support at 280.3 and below same could see a test of 277.2 levels, and resistance is now likely to be seen at 286.2, a move above could see prices testing 289.

Trading Ideas:

* Zinc trading range for the day is 277.2-289.

* Zinc prices remained supported as dollar seen pressure after GDP growth for the US came below forecasts and PCE prices increased faster than anticipated

* UBS sees zinc prices at 3,600/mt by end–Mar 2022, $3,100/mt by end-Dec 2022

* PBoC injects CNY 200 billion into market for 4th day


Nickel

Nickel yesterday settled down by -0.09% at 1518.5 as the global nickel market deficit fell to 15,500 tonnes in August from a shortfall a month earlier of 25,700 tonnes, data from the International Nickel Study Group (INSG) showed. During the first eight months of the year, the nickel market saw a deficit of 172,200 tonnes compared with a surplus of 87,200 tonnes in the same period last year, the Lisbon-based INSG added. The premium of LME cash nickel over the three-month contract shot up to $189 a tonne, a level unseen since October 2019, indicating tightness of nearby supplies, following Eramet's report of a drop in ferronickel output in New Caledonia due to a wave of COVID-19 infections there. Nickel price has been hovering at the $20,000 level supported by lower supply and recovering demand as economies reopen as Covid-19 restrictions lifted. Nickel pig iron market in China continues to be very tight due to power rationing and some supply concerns from Indonesia and the Philippines. Guizhou province in China has asked some smelters to shut down temporarily due to power shortages. For nickel in China continues to be very tight due to power rationing and some supply concerns from Indonesia and the Philippines. Technically market is under fresh selling as market has witnessed gain in open interest by 3.28% to settled at 1481 while prices down -1.4 rupees, now Nickel is getting support at 1508.2 and below same could see a test of 1498 levels, and resistance is now likely to be seen at 1531.7, a move above could see prices testing 1545.

Trading Ideas:

* Nickel trading range for the day is 1498-1545.

* Nickel pared gains to settle flat as the global nickel market deficit fell to 15,500 tonnes in August from a shortfall a month earlier of 25,700 tonnes

* The premium of LME cash nickel over the three-month contract shot up to $189 a tonne, indicating tightness of nearby supplies

* UBS sees nickel prices at $22,000/mt by end–Mar 2022, $19,000/mt by end-Dec 2022

 

Aluminium

Aluminium yesterday settled up by 2.92% at 221.75 as traders refocused on the impact that power restrictions in China will have on energy-intensive smelters producing the metal. Earlier in the day prices in Shanghai fell to their lowest in more than three months, as tumbling coal prices eased worries about rising production costs for the energy-intensive metal. Chinese thermal coal prices surged to a record 1,892 yuan on Oct. 19 on supply shortage, but have since lost some 50% on a series of measures implemented by the country's authorities to curb rocketing energy costs. China’s state planner said it would step in to cool soaring prices for coal, which powers aluminium smelters, during a severe power crunch. China’s state planner has set an immediate price target for thermal coal in its most direct intervention yet to cool the market for the key power-generating fuel. The global supply of aluminium will remain tight, citing pressure on smelter margins in China and warnings by major producers Norsk Hydro and Rusal of continued shortages. Aluminium output in China, the world’s top producer, declined for a fifth consecutive month in September. On-warrant inventories of aluminium available to the market in LME-registered warehouses eased to 625,350 tonnes, near its lowest since 2018. Technically market is under short covering as market has witnessed drop in open interest by -19.18% to settled at 2583 while prices up 6.3 rupees, now Aluminium is getting support at 213.7 and below same could see a test of 205.4 levels, and resistance is now likely to be seen at 227.1, a move above could see prices testing 232.2.

Trading Ideas:

* Aluminium trading range for the day is 205.4-232.2.

* Aluminium gained as traders refocused on the impact that power restrictions in China will have on energy-intensive smelters producing the metal.

* China’s state planner said it would step in to cool soaring prices for coal, which powers aluminium smelters, during a severe power crunch.

* UBS sees aluminum prices at $3,500/mt by end–Mar 2022, $3,200/mt by end-Dec 2022

 

Mentha oil

Mentha oil yesterday settled up by 0.06% at 949.6 on low level buying after prices as demand from consumer side is extremely weak and industrial demand is also not picking up. Prices got support in last few weeks as due to crop failure and low recovery of oil, availability of Mentha oil will be low and demand from industries are expected to improve ahead of winter season. Speculation are also high that production this year will be lower as compare with last year because of two important factors. Major physical market player expects demand to sluggish for next few week as cash crunch seen in spot market, while expectations are high about demand improvement ahead of winter season starts. China is one of the biggest buyer for Indian Mentha, no much buying inquiry from China as mainland China and Hong Kong markets were shut. Speculation are also high that production this year will be lower as compare with last year because of two important factors. Firstly damages due to rain in key area and secondly farmers for the last 2 years where sowing mentha but due to not getting much profit at intervals there had been shift to other crops also. In Sambhal spot market, Mentha oil gained by 39.7 Rupees to end at 1094.6 Rupees per 360 kgs.Technically market is under short covering as market has witnessed drop in open interest by -1.72% to settled at 1030 while prices up 0.6 rupees, now Mentha oil is getting support at 946.9 and below same could see a test of 944.2 levels, and resistance is now likely to be seen at 952.6, a move above could see prices testing 955.6.

Trading Ideas:

* Mentha oil trading range for the day is 944.2-955.6.

* In Sambhal spot market, Mentha oil gained  by 39.7 Rupees to end at 1094.6 Rupees per 360 kgs.

* Mentha oil gained on low level buying after prices dropped as demand from consumer side is extremely weak

* Prices got support in last few weeks as due to crop failure and low recovery of oil

* Availability of Mentha oil will be low and demand from industries are expected to improve ahead of winter season.

Soyabean

Soyabean yesterday settled down by -0.9% at 5310 as soyabean production is estimated to rise by 14 per cent to nearly 119 lakh tonnes this year on higher sowing area and likely improvement in productivity, according to industry body SOPA. In its estimate, Soyabean Processors Association of India (SOPA) said that the total area under soybean for the year 2021 is 119.984 lakh hectares. The government's area estimate is 123.677 lakh hectares. In last year's Kharif (summer sow) season, total soyabean acreage stood at 118.383 lakh hectare. China's soybean imports from Brazil in September fell 18% from a year earlier, customs data showed, as poor crush margins limited demand. The world's top buyer of soybeans brought in 5.936 million tonnes of the oilseed from Brazil last month, versus 7.25 million tonnes in the corresponding year-ago period, data from the General Administration of Customs showed. Crushers stepped up purchases last year from top supplier Brazil as a fast recovering pig herd pushed up demand. But their buying has slowed in recent months, as falling hog prices hit margins. U.S. soybean export sales for the week ended Oct. 7 were 2.88 million tonnes, primarily due to sales to China, beating trade expectations, according to the U.S. Department of Agriculture. At the Indore spot market in top producer MP, soybean gained 42 Rupees to 5454 Rupees per 100 kgs.Technically market is under long liquidation as market has witnessed drop in open interest by -7.98% to settled at 72025 while prices down -48 rupees, now Soyabean is getting support at 5254 and below same could see a test of 5197 levels, and resistance is now likely to be seen at 5414, a move above could see prices testing 5517.

Trading Ideas:

* Soyabean trading range for the day is 5197-5517.

* Soyabean dropped as soyabean production is estimated to rise by 14 per cent to nearly 119 lakh tonnes this year

* China's soybean imports from Brazil in September fell 18% from a year earlier, customs data showed, as poor crush margins limited demand.

* Soyabean production is estimated to rise by 14 per cent to nearly 119 lakh tonnes this year

* At the Indore spot market in top producer MP, soybean gained  42 Rupees to 5454 Rupees per 100 kgs.

Soyaoil

Ref.Soyaoil yesterday settled down by -0.57% at 1260.3 on profit booking after prices gained as the vegetable oil market faces a significant squeeze due to lower output. India slashed its base import tax on crude palm oil, crude soyoil and crude sunflower oil to zero from 2.5%, as the world's biggest vegetable oil buyer tries to cool near-record price rises. The Govt. has decided to impose stock limits on edible oils and oilseeds up to March 31, 2022. This decision has been taken to soften the prices of edible oils in the country and provide relief to consumers. The Ministry said that the stock limits will be decided by the respective state governments depending on local conditions. It has however decided to give exemption to importers and exporters subject to conditions. Oilseeds output is also expected to be down a tad at 23.38 mt as soyabean production was affected by the patchy rains in the key producing States of Gujarat and Madhya Pradesh, respectively. Favorable weather over the weekend boosted U.S. harvest, while exports remain capped by terminals on the U.S. Gulf Coast that continue to struggle with power outages and hurricane-led damage as the country heads into its busiest export season. At the Indore spot market in Madhya Pradesh, soyoil was steady at 1308.4 Rupees per 10 kgs.Technically market is under fresh selling as market has witnessed gain in open interest by 2.37% to settled at 41200 while prices down -7.2 rupees, now Ref.Soya oil is getting support at 1257 and below same could see a test of 1252 levels, and resistance is now likely to be seen at 1267, a move above could see prices testing 1272.

Trading Ideas:

* Ref.Soya oil trading range for the day is 1252-1272.

* Ref soyoil dropped on profit booking after prices gained as the vegetable oil market faces a significant squeeze due to lower output.

* Oilseeds output is also expected to be down a tad at 23.38 mt as soyabean production was affected.

* India’s Sept edible oil stocks at ports and pipelines rose 3.24 percent mom: SEA

* At the Indore spot market in Madhya Pradesh, soyoil was steady at 1308.4 Rupees per 10 kgs.

palm Oil

Crude palm Oil yesterday settled down by -0.23% at 1123.3 on profit booking after prices gained in recent sessions as supply constraints due to the rainy season and strength in rival oils supported the market. Prices are seen rising as the rainy season and coronavirus-linked labour shortage are slowing output in Malaysia. October export data improved amid tight supply worries. The Southern Peninsula Palm Oil Millers' Association (SPPOMA) estimated Oct. 1-15 production declined 0.2% from the month before in some parts of Malaysia. The Indian Vegetable Oils Producers Association says it is seeing early signs of demand shifting from palm oil to soft oils after India's duty cut made soft oil more attractive. Malaysia's crude palm oil production in 2021 is forecast to decline by 700,000 tonnes to 18.4 million tonnes due to a labour shortage and erratic weather conditions, state agency the Malaysian Palm Oil Council (MPOC) said. Neighbouring Indonesia has not faced such labour issues and has expanded its planted area by about 200,000 hectares this year, MPOC chief executive Wan Zawawi Wan Ismail said. Production in the world's largest palm oil producer is projected to rise by 2.5 million tonnes to 45.5 million tonnes, he said. Indonesian palm oil exports in 2021 will likely be much lower than previously forecast, at 34.423 million tonnes, the vice chairman of the Indonesia Palm Oil Association (GAPKI) told. In spot market, Crude palm oil dropped by -11.2 Rupees to end at 1137.1 Rupees.Technically market is under fresh selling as market has witnessed gain in open interest by 1.73% to settled at 5009 while prices down -2.6 rupees, now CPO is getting support at 1117 and below same could see a test of 1110.6 levels, and resistance is now likely to be seen at 1128.8, a move above could see prices testing 1134.2.

Trading Ideas:

* CPO trading range for the day is 1110.6-1134.2.

* Crude palm oil dropped on profit booking after prices gained in recent sessions as supply constraints due to the rainy season.

* Prices are seen rising as the rainy season and coronavirus-linked labour shortage are slowing output in Malaysia.

* The Southern Peninsula Palm Oil Millers' Association estimated Oct. 1-15 production declined 0.2% from the month before in some parts of Malaysia.

* In spot market, Crude palm oil dropped  by -11.2 Rupees to end at 1137.1 Rupees.

Turmeric

Turmeric yesterday settled up by 0.19% at 7408 following export demand from Europe, Gulf countries and Bangladesh. However upside seen limited amid prospects of better crop this kharif season along with tepid demand. The areas where turmeric has been sown have received adequate rainfall and are expected to produce well in the next season. Due to favorable weather, production is likely to be higher in 2021-22 (July-June) season. Besides, heavy carryover stocks and slack in bulk demand are keeping prices under pressure. In the first 4 months of FY 2021-22, turmeric exports declined by 26% to 53,000 tonnes as compared to the same period last year, but almost at the same level as the 5-year average. Support is expected on the news that due to June and July floods almost 10% crop washed away so we can see 10-15 % less sowing also farmers had shown interested in other crops as prices where more. Pressure also seen as the lockdown restrictions were eased the key Turmeric growing states, including Maharashtra and Telangana reported noticeable increase in mandi arrivals, which augmented physical market supplies and pressurized prices. In the first 6 months of 2021, turmeric exports declined by 3% to 77,300 tonnes compared to the same period last year, but could be higher in the coming months. In Nizamabad, a major spot market in AP, the price ended at 7152.2 Rupees gained 25.65 Rupees.Technically market is under short covering as market has witnessed drop in open interest by -4.23% to settled at 7915 while prices up 14 rupees, now Turmeric is getting support at 7332 and below same could see a test of 7258 levels, and resistance is now likely to be seen at 7464, a move above could see prices testing 7522.
Trading Ideas:

* Turmeric trading range for the day is 7258-7522.

* Turmeric prices gained following export demand from Europe, Gulf countries and Bangladesh.

* However upside seen limited amid prospects of better crop this kharif season along with tepid demand.

* The areas where turmeric has been sown have received adequate rainfall and are expected to produce well in the next season.

* In Nizamabad, a major spot market in AP, the price ended at 7152.2 Rupees gained 25.65 Rupees.

Jeera

Jeera yesterday settled down by -1.54% at 15045 as adequate stock with traders and farmers may keeping prices under pressure at higher levels. However downside seen limited as the export of cumin is increasing continuously and in the coming days there are signs of increasing the export of cumin in a big way. With the forecast of normal rains in the western region during September to November, the sowing of cumin seeds in Gujarat and Rajasthan may increase. In 2021 (January-June), the country has exported more than 1.50 lakh tonnes of cumin as compared to 1.3 lakh tonnes in the same period last year. Purchase of cumin seeds from African and Middle East countries will be diverted from other countries to India this year. Recent estimates state that cumin production has slumped by 60% in Iran’s Razavi Khorasan Province due to severe drought and unusually cold weather coupled with an early spring. Rainfall ranges 63% lower than last year this season so far. Temperatures ranged 3.1-0.4C (37.58-32.72F) lower between October 2020 and April 2021 than in the same period in 2019/2020 according to official statistics. Extensive crop losses seen, the early onset of spring in February also caused serious damage to production. In Unjha, a key spot market in Gujarat, jeera edged down by -66.65 Rupees to end at 14713.35 Rupees per 100 kg.Technically market is under long liquidation as market has witnessed drop in open interest by -3.31% to settled at 5343 while prices down -235 rupees, now Jeera is getting support at 14810 and below same could see a test of 14570 levels, and resistance is now likely to be seen at 15335, a move above could see prices testing 15620.

Trading Ideas:

* Jeera trading range for the day is 14570-15620.

* Jeera dropped as adequate stock with traders and farmers may keeping prices under pressure at higher levels.

* However downside seen limited as the export of cumin is increasing continuously and in the coming days there are signs of increasing the export of cumin

* India's cumin exports will increase due to less supply from Afghanistan-Syrian

* In Unjha, a key spot market in Gujarat, jeera edged down by -66.65 Rupees to end at 14713.35 Rupees per 100 kg.

Cotton

Cotton yesterday settled up by 1.14% at 32040 amid low production, rising demand and supply constraints. Currently, raw cotton prices in various markets across the country are ruling above ₹7,000 a quintal against the MSP of ₹5,726 fixed for this year. Prices much above MSP means the CCI will not need to do any market intervention this year. Prices are moving up since the cotton balance sheet is tight and ending stocks are lower. Except China, no other country seems to have ample stocks. Cotton exports could be lower at 50 lakh bales this season (October 2021-September 2022) compared with 75-80 lakh bales last season. SIMA said the Committee on Cotton Production and Consumption (CCPC) had pegged the carryover stocks at 120 lakh bales and if additional 10-15 lakh bales of cotton would have been consumed or exported, ending stocks could be 105 lakh bales. SIMA said cotton production this year is estimated to be 360 lakh bales (170 kg) and if the carryover stocks are pegged at 100 lakh bales and imports at 10 lakh bales, the industry would have a total supply of 470 lakh bales. According to estimates of CAI, a trade body, the carryover stocks are estimated at 82.50 lakh bales. In spot market, Cotton gained by 320 Rupees to end at 30890 Rupees.Technically market is under fresh buying as market has witnessed gain in open interest by 2.05% to settled at 3130 while prices up 360 rupees, now Cotton is getting support at 31660 and below same could see a test of 31280 levels, and resistance is now likely to be seen at 32300, a move above could see prices testing 32560.

Trading Ideas:

* Cotton trading range for the day is 31280-32560.

* Cotton prices remained supported amid low production, rising demand and supply constraints.

* Projections of tight supplies later this season leave industry worried

* Indian cotton exports will be reduced by 35 per cent from 78 lakh bales (last year) to around 45-50 lakh bales this year

* In spot market, Cotton gained  by 320 Rupees to end at 30890 Rupees.

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