Technically Cotton market is under long liquidation as market has witnessed drop in open interest by 8.29% to settled at 2279 while prices down 150 rupees.
Now MCX Cotton is getting support at 31420 and below same could see a test of 31230 levels, and resistance is now likely to be seen at 31970, a move above could see prices testing 32330.
Cotton yesterday settled down by 0.47% at 31610 as China will start a new round of sales from its cotton reserves, with a total 600,000 tonnes of imported and domestic cotton to be sold off in daily auctions, according to an official notice.
It is the second batch of cotton to be released from reserves this year and is designed to better meet demand for the fibre from spinning companies.
However downside seen limited bolstered by strong demand from both the domestic textile sector and export markets over the last year, and high global prices.
Both production estimates for the 2021/22 crop year and ending stocks in the U.S. were largely unchanged at 18.20 million bales and 3.40 million bales respectively, the USDA said in its November World Agricultural Supply and Demand Estimates (WASDE) report.
India’s cotton production in 2021-22 season is likely to be 360.13 lakh bales of 170 kg each (equivalent to 382.64 lakh running bales of 160 kg each), which is more by 7.13 lakh bales than the previous season’s crop of 353 lakh bales, the Cotton Association of India (CAI) has said in its first estimate for the new season beginning October 1, 2021. In spot market, Cotton dropped by 80 Rupees to end at 32100 Rupees.
–Cotton trading range for the day is 31230-32330.
–Cotton dropped as China will start a new round of sales from its cotton reserves
–However downside seen limited amid strong demand from both the domestic textile sector and export markets
–China starts new round of cotton sales to boost supply
–In spot market, Cotton dropped by -80 Rupees to end at 32100 Rupees.
Courtesy: Kedia Commodities
Source: Comodity Online