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Gold

Gold yesterday settled down by -0.8% at 47813 after the dollar steadied and risk-on sentiment in markets, powered by strong earnings on Wall Street, dented demand for the safe-haven metal. U.S. consumer confidence unexpectedly rose in October as concerns about high inflation were offset by improving labor market prospects, suggesting economic growth picked up early in the fourth quarter. The Conference Board said its consumer confidence index increased to a reading of 113.8 this month from 109.8. U.S. Treasury Secretary Janet Yellen "frankly raised issues of concern" in a virtual meeting with Chinese Vice Premier Liu He, the U.S. Treasury said in a statement. The Treasury statement did not elaborate on the concerns. It said the two officials "discussed macroeconomic and financial developments in the United States and China, recognizing that developments in our two economies have important implications for the global economy." China's net gold imports via Hong Kong jumped 59.5% in September from the previous month, Hong Kong Census and Statistics Department data showed. Net imports stood at 34.786 tonnes in September compared with 21.804 tonnes in August, the data showed. The Bank of Japan and the European Central Bank are set to hold monetary policy meetings on Thursday, while the U.S. Federal Reserve’s policy meeting is due next week. Technically market is under long liquidation as market has witnessed drop in open interest by -6.22% to settled at 10627 while prices down -387 rupees, now Gold is getting support at 47504 and below same could see a test of 47196 levels, and resistance is now likely to be seen at 48200, a move above could see prices testing 48588.

Trading Ideas:

* Gold trading range for the day is 47196-48588.

* Gold prices fell after the dollar steadied and risk-on sentiment in markets, dented demand for the safe-haven metal.

* U.S. Treasury's Yellen raised 'issues of concern' with Chinese Vice Premier Liu

* China's net gold imports via Hong Kong rise 59.5% in September

 

Silver

Silver yesterday settled down by -1.74% at 64989 as the dollar firmed up ahead of key central bank meetings this week. The European Central Bank (ECB) is expected to take a dovish stance when it meets on Thursday. The U.S. Federal Reserve meets next week and it is likely that the U.S. central bank will announce plans to begin scaling back its asset purchase program. Fed Chair Jerome Powell's comments that although the central bank will start tapering its bond-buying program this year, but "it is not yet time to begin raising interest rates," pushed the dollar to near one-month low earlier in the day. Powell said at a virtual conference that the present high price pressure may not subside soon and that the central bank was on track to start tapering its stimulus. U.S. consumer confidence unexpectedly rose in October as concerns about high inflation were offset by improving labor market prospects, suggesting economic growth picked up early in the fourth quarter. The Conference Board said its consumer confidence index increased to a reading of 113.8 this month from 109.8. Sales of new U.S. single-family homes surged to a six-month high in September, but higher house price are making homeownership less affordable for some first-time buyers. Technically market is under fresh selling as market has witnessed gain in open interest by 7.01% to settled at 10377 while prices down -1150 rupees, now Silver is getting support at 64323 and below same could see a test of 63656 levels, and resistance is now likely to be seen at 65946, a move above could see prices testing 66902.

Trading Ideas:

* Silver trading range for the day is 63656-66902.

* Silver dropped as the dollar firmed up ahead of key central bank meetings this week.

* Sales of new U.S. single-family homes surged to a six-month high in September

* Fed Chair Jerome Powell's comments that although the central bank will start tapering its bond-buying program this year
 

 

Crude oil

Crude oil yesterday settled up by 0.78% at 6360 supported by a global supply shortage and strong demand in the United States, the world’s biggest consumer. While China's red-hot power and coal markets have cooled somewhat after government intervention, energy prices remain elevated worldwide as temperatures fall with the onset of the northern winter. Goldman Sachs said Brent is likely to push above its year-end forecast of $90 a barrel. The bank estimated switching to oil from gas may add 1 million barrels per day (bpd) to oil demand. Gasoline and distillate consumption is back in line with five-year averages in the United States after more than a year of depressed demand. The market will be closely watching U.S. inventory levels this week. Crude oil stockpiles are forecast to have risen by 1.7 million barrels last week. Gasoline and distillate inventories were expected to fall, however. The South Korean government has decided to temporarily slash domestic tax on key oil products by 20%, a ruling party official told, to reduce pressures from surging global oil and energy prices. That would be the biggest cut on record, the party official Park Wan-joo said, adding the new tax rate will take effect on Nov. 12 for a period of six months to April 30, 2022. Technically market is under fresh buying as market has witnessed gain in open interest by 13.15% to settled at 7166 while prices up 49 rupees, now Crude oil is getting support at 6276 and below same could see a test of 6191 levels, and resistance is now likely to be seen at 6412, a move above could see prices testing 6463.

Trading Ideas:

* Crude oil trading range for the day is 6191-6463.

* Crude oil gains supported by a global supply shortage and strong demand in the United States, the world’s biggest consumer.

* Goldman sees upside risks to $90/bbl Brent price forecast

* S.Korea govt to cut down oil tax by 20% for 6 month

 

Nat.Gas

Nat.Gas yesterday settled up by 0.07% at 452.9 erasing all losses on forecasts calling for colder weather and higher heating demand over the next two weeks than previously expected. Even though the weather is expected to remain mild, traders noted that prices declined despite expectations for cooler weather and higher heating demand next week than previously forecast and as a rise in global gas prices keeps demand for U.S. liquefied natural gas (LNG) exports strong. Gas prices around the world were trading near record highs that were about six times over prices in the United States, as utilities in Europe and Asia scramble for all the fuel they can get to refill stockpiles ahead of the winter heating season and meet current energy shortfalls causing power blackouts in China. Data provider Refinitiv said output in the U.S. Lower 48 states has averaged 92.2 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. Refinitiv projected average U.S. gas demand, including exports, would rise from 89.2 bcfd this week to 92.4 bcfd next week as more homes and businesses turn on their heaters. The forecast for next week was higher than Refinitiv projected on Monday. Technically market is under short covering as market has witnessed drop in open interest by -4.57% to settled at 5091 while prices up 0.3 rupees, now Natural gas is getting support at 433.2 and below same could see a test of 413.6 levels, and resistance is now likely to be seen at 470.7, a move above could see prices testing 488.6.

Trading Ideas:

* Natural gas trading range for the day is 413.6-488.6.

* Natural gas settled flat erasing all losses on forecasts calling for colder weather and higher heating demand

* Even though the weather will be cooler over the next two weeks, it was still forecast to remain milder than normal through early November.

* The U.S. price spike also occurred despite a slight decline in global gas prices and an increase in U.S. gas output.


Copper

Copper yesterday settled down by -0.77% at 762.55 on a small uptick in readily available exchange inventories and a firm dollar. The dollar has bounced off recent lows and was firm in choppy trade ahead of a handful of data releases and central bank meetings which investors expect to guide the rates outlook. On-warrant copper stockpiles in LME warehouses rose for the fourth straight session to 23,300 tonnes, rebounding slightly from a 1998-low hit on Oct. 14 of 14,150 tonnes that sparked supply concerns and pushed premium of cash LME to a record high over the three-month contract. The London Metal Exchange took actions to maintain an orderly market after wild outright and spread price moves and dwindling inventories. The measures included changing its lending guidance rules, limiting the backwardation and allowing deferred delivery of some positions. The global world refined copper market showed a 31,000 tonnes deficit in July, compared with a 98,000 tonnes deficit in June, the International Copper Study Group (ICSG) said in its latest monthly bulletin. For the first 7 months of the year, the market was in a 138,000 tonnes deficit compared with a 41,000 tonnes deficit in the same period a year earlier, the ICSG said. World refined copper output in July was 2.07 million tonnes, while consumption was 2.11 million tonnes. Technically market is under fresh selling as market has witnessed gain in open interest by 5.03% to settled at 4196 while prices down -5.95 rupees, now Copper is getting support at 757.8 and below same could see a test of 752.9 levels, and resistance is now likely to be seen at 769.5, a move above could see prices testing 776.3.

Trading Ideas:

* Copper trading range for the day is 752.9-776.3.

* Copper prices fell on a small uptick in readily available exchange inventories and a firm dollar.

* On-warrant copper stockpiles in LME warehouses rose for the fourth straight session to 23,300 tonnes

* Copper market in 31,000 tonnes deficit in Jul 2021 – ICSG

 

Zinc

Zinc yesterday settled down by -0.81% at 282.9 as the SHFE and LME inventories both climbed, and the domestic consumption has been sluggish. The goods holders were active in selling, while the downstream long-term contracts were mostly made on rigid demand. The global zinc market deficit declined to 14,900 tonnes in August from a revised deficit of 40,400 tonnes in July, data from the International Lead and Zinc Study Group (ILZSG) showed. Previously, the ILZSG had reported a deficit of 6,600 tonnes in July. During the first eight months of 2021, the ILZSG data showed a deficit of 57,000 tonnes versus a surplus of 446,000 tonnes in the same period of 2020. Around 13.5 million tonnes of zinc are produced and consumed each year. On the macro front, the National Development and Reform Commission has issued relative documents to contain coal prices for 7 days in a row, suppressing long sentiment in the market. Sales of new U.S. single-family homes surged to a six-month high in September, but higher house price are making homeownership less affordable for some first-time buyers. New home sales jumped 14.0% to a seasonally adjusted annual rate of 800,000 units last month, the highest level since March, the Commerce Department said. Technically market is under fresh selling as market has witnessed gain in open interest by 2.21% to settled at 1016 while prices down -2.3 rupees, now Zinc is getting support at 280 and below same could see a test of 276.9 levels, and resistance is now likely to be seen at 286.6, a move above could see prices testing 290.1.

Trading Ideas:

* Zinc trading range for the day is 276.9-290.1.

* Zinc remained under pressure as the SHFE and LME inventories both climbed, and the domestic consumption has been sluggish.

* Global zinc market deficit falls to 14,900 T in August, ILZSG says

* During the first eight months of 2021, data showed a deficit of 57,000 tonnes versus a surplus of 446,000 tonnes in the same period of 2020.

 

Nickel

Nickel yesterday settled down by -0.83% at 1565.2 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 long liquidation as market has witnessed drop in open interest by -8.79% to settled at 1400 while prices down -13.1 rupees, now Nickel is getting support at 1551.9 and below same could see a test of 1538.7 levels, and resistance is now likely to be seen at 1583.6, a move above could see prices testing 1602.1.

Trading Ideas:

* Nickel trading range for the day is 1538.7-1602.1.

* Nickel prices dropped as global nickel market deficit shrinks in August to 15,500 T

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

* Nickel pig iron market in China continues to be very tight due to power rationing and some supply concerns from Indonesia and the Philippines


Aluminium

Aluminium yesterday settled down by -2.01% at 229.5 as domestic social inventory of aluminium increased from 11,000 mt last Thursday to 968,000 mt on October 25. Global primary aluminium output rose in September to 5.508 million tonnes, up 1.77% year on year, data from the International Aluminium Institute (IAI) showed. Estimated Chinese production was 3.183 million tonnes in September, the IAI said. The People’s Bank of China (PBOC) injected a total CNY 200 billion of seven-day reverse repos at an interest rate of 2.2 percent on October 26th, the same as in the previous day, and marking the second straight day of injections in the financial system. The central bank said, the move aims to countering factors including tax payments and government bond issuance in order to keep banking system liquidity reasonably ample. On the macro front, former US Fed Chair Greenspan said the inflation rate will stay above the Fed’s target of 2% for a continuous period of time. And the leading Wall Street banks are betting on an early interest rate kike of the Fed and Bank of America’s raising its yield. On the supply side, a new aluminium plant has encountered power rationing and the transportation of aluminium ingots and rods produced in northwest China has been hindered. Technically market is under fresh selling as market has witnessed gain in open interest by 19.57% to settled at 2585 while prices down -4.7 rupees, now Aluminium is getting support at 227.3 and below same could see a test of 225 levels, and resistance is now likely to be seen at 232.7, a move above could see prices testing 235.8.

Trading Ideas:

* Aluminium trading range for the day is 225-235.8.

* Aluminium prices dropped as domestic social inventory of aluminium increased from 11,000 mt to 968,000 mt.

* Global aluminium output rises 1.77% y/y to 5.5 mln T in Sept – IAI

* PBoC injects CNY 200 billion into market for 2nd Day
 

 

Mentha oil yesterday settled up by 0.9% at 952.1 on low level buying after prices dropped 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 0.3 Rupees to end at 1094 Rupees per 360 kgs.Technically market is under fresh buying as market has witnessed gain in open interest by 0.29% to settled at 1042 while prices up 8.5 rupees, now Mentha oil is getting support at 945.4 and below same could see a test of 938.7 levels, and resistance is now likely to be seen at 956, a move above could see prices testing 959.9.

Trading Ideas:

* Mentha oil trading range for the day is 938.7-959.9.

* In Sambhal spot market, Mentha oil gained  by 0.3 Rupees to end at 1094 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 up by 1.3% at 5227 on short covering after prices dropped 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 60 Rupees to 5325 Rupees per 100 kgs.Technically market is under short covering as market has witnessed drop in open interest by -5.89% to settled at 80025 while prices up 67 rupees, now Soyabean is getting support at 5166 and below same could see a test of 5105 levels, and resistance is now likely to be seen at 5274, a move above could see prices testing 5321.

Trading Ideas:

* Soyabean trading range for the day is 5105-5321.

* Soyabean gained on short covering after prices dropped as 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  60 Rupees to 5325 Rupees per 100 kgs.

 

Soyaoil

Ref.Soyaoil yesterday settled up by 0.25% at 1252.8 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. India's vegetable oil imports are likely to contract for the second straight year, the Solvent Extractors' Association of India (SEA) said. At the Indore spot market in Madhya Pradesh, soyoil was steady at 1297.6 Rupees per 10 kgs.Technically market is under fresh buying as market has witnessed gain in open interest by 2.52% to settled at 41760 while prices up 3.1 rupees, now Ref.Soya oil is getting support at 1249 and below same could see a test of 1246 levels, and resistance is now likely to be seen at 1257, a move above could see prices testing 1262.

Trading Ideas:

* Ref.Soya oil trading range for the day is 1246-1262.

* Ref soyoil prices seen supported 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 1297.6 Rupees per 10 kgs.

 

palm Oil

Crude palm Oil yesterday settled down by -0.3% at 1117.7 on pofit booking after prices seen supported 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 gained by 6.8 Rupees to end at 1151.8 Rupees.Technically market is under fresh selling as market has witnessed gain in open interest by 1.57% to settled at 5444 while prices down -3.4 rupees, now CPO is getting support at 1112.8 and below same could see a test of 1107.9 levels, and resistance is now likely to be seen at 1124.8, a move above could see prices testing 1131.9.

Trading Ideas:

* CPO trading range for the day is 1107.9-1131.9.

* Crude palm oil dropped on pofit booking after prices seen supported 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 gained  by 6.8 Rupees to end at 1151.8 Rupees.

 

Turmeric

Turmeric yesterday settled down by -0.39% at 7144 amid prospects of better crop this kharif season along with tepid demand. However downside seen limited following export demand from Europe, Gulf countries and Bangladesh. 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 7113.9 Rupees gained 36.65 Rupees.Technically market is under long liquidation as market has witnessed drop in open interest by -5.81% to settled at 9975 while prices down -28 rupees, now Turmeric is getting support at 7102 and below same could see a test of 7062 levels, and resistance is now likely to be seen at 7192, a move above could see prices testing 7242.

Trading Ideas:

* Turmeric trading range for the day is 7062-7242.

* Turmeric remained under pressure amid prospects of better crop this kharif season along with tepid demand.

* However downside seen limited following export demand from Europe, Gulf countries and Bangladesh.

* 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 7113.9 Rupees gained 36.65 Rupees.

 

Jeera

Jeera yesterday settled up by 1.03% at 15190 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. However upside seen limited as adequate stock with traders and farmers may keeping prices under pressure at higher levels. 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 up by 216.2 Rupees to end at 14742.85 Rupees per 100 kg.Technically market is under short covering as market has witnessed drop in open interest by -5.1% to settled at 5751 while prices up 155 rupees, now Jeera is getting support at 15060 and below same could see a test of 14930 levels, and resistance is now likely to be seen at 15320, a move above could see prices testing 15450.

Trading Ideas:

* Jeera trading range for the day is 14930-15450.

* Jeera gained as the export of cumin is increasing continuously and in the coming days there are signs of increasing the export of cumin.

* However upside seen limited as adequate stock with traders and farmers may keeping prices under pressure at higher levels.

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

* In Unjha, a key spot market in Gujarat, jeera edged up by 216.2 Rupees to end at 14742.85 Rupees per 100 kg.

 

Cotton

Cotton yesterday settled up by 1.26% at 31390 as Cotton Association of India (CAI), a body of traders, has reduced its estimate of the cotton crop last season (October 2020- September 2021) to 353 lakh bales (each 170 kg) from its previous estimate of 354.5 lakh bales. The final estimate is about 7 lakh bales lower than the 360 lakh bales of crop estimated initially. The total cotton availability for the year is estimated at 488 lakh bales, including an opening stock of 125 lakh bales and import of 10 lakh bales besides the 353 lakh bales of crop. As per the CAI’s cotton balance-sheet for the year, the closing stock is estimated to be 75 lakh bales, which is lower than last year’s estimated 107.5 lakh bales of carryover stock. CAI has increased its cotton consumption estimate for the year by 5 lakh bales to 335 lakh bales from last year’s estimated consumption of 250 lakh bales, showing an increase of 34 per cent over last year. The U.S. Department of Agriculture's (USDA) latest weekly export sales report showed a 41% drop from the previous week in net sales for 2021/2022. In spot market, Cotton gained by 160 Rupees to end at 30510 Rupees.Technically market is under fresh buying as market has witnessed gain in open interest by 7.99% to settled at 2891 while prices up 390 rupees, now Cotton is getting support at 31030 and below same could see a test of 30680 levels, and resistance is now likely to be seen at 31600, a move above could see prices testing 31820.

Trading Ideas:

* Cotton trading range for the day is 30680-31820.

* Cotton prices seen supported as Cotton trade body trims 2020-21 crop estimate to 353 lakh bales

* CAI has increased its cotton consumption estimate for the year by 5 lakh bales to 335 lakh bales

* USDA latest weekly export sales report showed a 41% drop from the previous week in net sales for 2021/2022.

* In spot market, Cotton gained  by 160 Rupees to end at 30510 Rupees.
 

 

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