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Wednesday, October 27, 2021

MCX Cotton under short covering; Resistance seen at 30640

Technically Cotton market is under short covering as market has witnessed drop in open interest by 14.32% to settled at 2016 while prices up 510 rupees.

Now MCX Cotton is getting support at 29420 and below same could see a test of 28960 levels, and resistance is now likely to be seen at 30640, a move above could see prices testing 31400.

Cotton yesterday settled up by 1.74% at 29870 because of threat regarding significant crop damage in the affected areas, in addition to possibility of harvest delays.

The pink bollworm attack has been discovered in Bathinda district’s cotton farms in Punjab. The harvest in Punjab shall begin by next week.

The recent developments regarding pink bollworm infestations in Punjab, Haryana and heavy rains in Madhya Pradesh and Maharashtra have started raising doubts regarding this season’s crop size.

In earlier forecasts, the US Department of Agriculture (USDA) and the Cotton Corporation of India (CCI) have come out with a better harvest versus previous year. Cotton is grown around 4.8 lakh hectares in the state of Punjab.

Reports say that Sirsa, Fatehabad, Hisar, Mahendragarh, and Jind in Haryana, and Bathinda and Mansa in Punjab, are some of the districts affected by the pink bollworm infestation.

The regions of Maharashtra and Madhya Pradesh are also reportedly affected adversely, from the heavy rains across the respective productive belts.

The Haryana government directed all deputy commissioners to send reports regarding the recent damage to cotton crop due to heavy rains and waterlogging by October 15. In spot market, Cotton gained by 750 Rupees to end at 28020 Rupees.

Trading Ideas:
–Cotton trading range for the day is 28960-31400.
–Cotton prices gained because of threat regarding significant crop damage in the affected areas
–The recent developments regarding pink bollworm infestations in Punjab, Haryana have started raising doubts regarding this season’s crop size.
–The regions of Maharashtra and Madhya Pradesh are also reportedly affected adversely, from the heavy rains across the respective productive belts.
–In spot market, Cotton gained  by 750 Rupees to end at 28020 Rupees.

Courtesy: Kedia Commodities

Source: Comodity Online

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