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Sunday, January 16, 2022

MCX Cotton likely to move in a range of 31010-32390

Technically Cotton market is under fresh buying as market has witnessed gain in open interest by 6.62% to settled at 4910 while prices up 180 rupees.

Now MCX Cotton is getting support at 31410 and below same could see a test of 31010 levels, and resistance is now likely to be seen at 32100, a move above could see prices testing 32390.

Cotton yesterday settled up by 0.57% at 31820 as arrivals of new crop to mandis is currently slow and domestic mills are making limited purchases given the high price of the natural fibre.

The discovery of a new coronavirus variant dampened market sentiment and stoked concerns over demand for the natural fiber.

Meanwhile, the U.S. Department of Agriculture’s weekly export sales report showed net sales of 196,900 running bales, up 44% from the previous week and 3% from the prior four-week average, with China being the top buyer.

According to traders, arrivals of new crop to Ahmedabad mandis is currently slow and domestic mills are making limited purchases given the high price of the natural fibre. About 35,000 to 40,000 bales (one bale weighs 170kg) are arriving daily in local mandis. This should have been higher at 55,000 to 60,000 bales.

However downside seen limited in anticipation of a possible fall in production, and the remaining cotton stock is also low, while import demand from China remains high.

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. In spot market, Cotton dropped by 290 Rupees to end at 31620 Rupees.

Trading Ideas:
–Cotton trading range for the day is 31010-32390.
–Cotton prices gained as arrivals of new crop to mandis is currently slow
–However the discovery of a new coronavirus variant dampened market sentiment and stoked concerns over demand.
–Global authorities reacted with alarm to the new coronavirus variant, with the EU, India and Britain tightening border controls.
–In spot market, Cotton dropped  by 290 Rupees to end at 31620 Rupees.

Courtesy: Kedia Commodities

 

Source: Comodity Online

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