MCX Cotton under fresh selling; Support seen at 21060

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Technically Cotton market is under fresh selling as market has witnessed gain in by 0.01% to settled at 7358 while prices down 160 rupees.

Now MCX Cotton is getting support at 21060 and below same could see a test of 20970 levels, and resistance is now likely to be seen at 21290, a move above could see prices testing 21430.

Cotton on MCX settled down by 0.75% at 21160 on profit booking after prices gained supported by adverse weather condition for planting progress in central region. Monsoon been delayed this year and now slower progress of monsoon could impact the planting activities of kharif crops including cotton.

About 18.18 lakh hectare of area was sown under cotton across against the 20.68 lakh hectare of prior year for corresponding period down by 2.5% compare to last year as per Ministry of Agriculture.

However, cotton planting has been higher in Gujarat by 29% y/y as about 7.67 lakh hectare of area was sown under cotton till 24th in Gujarat compare to 2.41 lakh hectare of prior year.

Farmers in northern region of India has shown good interest to cultivate cotton over the other commercial crop due to better realization thereby overall acreages of cotton in northern states like Punjab, Rajasthan and Haryana has increased during year 2019-20.

As per the data compiled by ministry of agriculture cotton acreages in Punjab has increased by 41% y/y to 4 lakh hectare this year wherein same has expanded by 5% y/y to 6.35 lakh hectare in Haryana. USDA crop progress report showed that 54% of the natural fiber was in good to excellent condition compared with 52% the week before.

Trading Ideas:
–Cotton trading range for the day is 20970-21430.
–Cotton ended with losses on profit booking after prices gained supported by adverse weather condition for planting progress in central region
–USDA crop progress report showed that 54% of the natural fiber was in good to excellent condition compared with 52% the week before.
–Monsoon been delayed this year and now slower progress of monsoon could impact the planting activities of kharif crops including cotton.
–Cotton prices in spot market dropped by 220.00 rupees and settled at 21290.00 rupees.

Courtesy: Kedia Commodities

               

Source: Commodityonline.com