MCX Cotton under long liquidation; Support seen at 21120

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MCX Crude Palm under long liquidation

Technically Cotton market is under long liquidation as market has witnessed drop in by 17.11% to settled at 6929 while prices down 60 rupees.

Now MCX Cotton is getting support at 21120 and below same could see a test of 20990 level, And resistance is now likely to be seen at 21460, a move above could see prices testing 21670.

Cotton on MCX settled down by 0.28% at 21250 on profit booking after prices gained due to reports of below normal monsoon and low level buying also support prices. Recently, CAI has projected cotton exports at 46 lakh bales compared to 69 lakh bales last year due to higher prices and smaller crop size.

This is a reduction of six lakh bales from the association’s previous estimate of 321 lakh bales released last month, due to lower output in Maharashtra, North Zone, Madhya Pradesh, Telangana and Andhra Pradesh.

CAI’s estimate lowers cotton crop estimate for 2018-19 season, which began on October 1, 2018, by two lakh bales for Maharashtra, compared to its March estimate. Like-wise, for the North Zone, Madhya Pradesh, Telangana and Andhra Pradesh, CAI has lowered cotton output estimate by one lakh bales each.

Cotton supply is dwindling quickly as 2018-19 crop is likely to be much lower than the initial projection of around 350 lakh bales.

In 2018/19, cotton output is estimated at 300.9 l-bales (of 170 kg each), down about 7.4% compared to previous estimate of 324 l-bales as per latest govt Adv Est.CAI cuts 2018-19 production estimate further by 2 l-bales to 328 l-bales for the year 2018-19. However, higher imports of 27 l-bales (Vs 15) and lower exports of 50 lakh bales (Vs 69) for 2018/19 season is bearish.

Trading Ideas:
–Cotton trading range for the day is 20990-21670.
–Cotton dropped on profit booking after prices gained due to reports of below normal monsoon and low level buying also support prices.
–CAI has projected cotton exports at 46 lakh bales compared to 69 lakh bales last year due to higher prices and smaller crop size.
–CAI’s April estimate lowers cotton crop estimate for 2018-19 season, which began on October 1, 2018, by two lakh bales for Maharashtra.
–Cotton prices in spot market gained by 100.00 rupees and settled at 21550.00 rupees. 

Courtesy: Kedia Commodities

Source: Commodityonline.com