Technically Cotton market is under long liquidation as market has witnessed drop in open interest by 1.48% to settled at 2061 while prices down 780 rupees.
Now MCX Cotton is getting support at 29420 and below same could see a test of 29070 levels, and resistance is now likely to be seen at 30150, a move above could see prices testing 30530.
Cotton yesterday settled down by 2.55% at 29770 as projections for higher global output and ending stocks outweighed reduction in U.S. production in a federal monthly supply and demand report. The USDA also raised global ending stock estimate by 450,000 bales to 87.13 million bales.
Meanwhile, the agency lowered China consumption by 1 million bales, citing high prices and energy crisis denting industrial activity. U.S. production in 2021/22 is now forecast at 18 million bales versus 18.51 million bales predicted last month, the USDA said, citing a decline in Texas.
The outlook for U.S. ending stocks is now for 3.2 million bales compared with 3.7 million bales last month, the WASDE report showed.
The Southern India Mills Association (SIMA) appealed to Prime Minister Narendra Modi to introduce an innovative Cotton Procurement and Trading Scheme for Cotton Corporation of India for price stability.
It can be done by providing government funding to procure 10 to 15 per cent of the cotton that arrive in the market during the season and by creating a strategic stock for price stability, selling cotton only to actual users in a staggered manner till the end of the season and maintaining some buffer stock for the next season, SIMA Chairman Ravi Sam said in a statement. In spot market, Cotton gained by 300 Rupees to end at 28860 Rupees.
–Cotton trading range for the day is 29070-30530.
–Cotton dropped as projections for higher global output and ending stocks outweighed reduction in U.S. production.
–USDA lowers China consumption by 1 mln bales
–The USDA also raised global ending stock estimate by 450,000 bales to 87.13 million bales.
–In spot market, Cotton gained by 300 Rupees to end at 28860 Rupees.
Courtesy: Kedia Commodities
Source: Comodity Online