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Saturday, January 29, 2022

MCX Cotton under long liquidation; Support seen at 29940

Technically Cotton market is under long liquidation as market has witnessed drop in open interest by 1.57% to settled at 4774 while prices down 630 rupees.

Now MCX Cotton is getting support at 29940 and below same could see a test of 29620 levels, and resistance is now likely to be seen at 30710, a move above could see prices testing 31160.

Cotton yesterday settled down by 2.04% at 30270 as the arrivals gain momentum, stated the chief of the top cotton body Cotton Association of India (CAI). Pressure also seen weighed by worries over the likely impact of the Omicron coronavirus variant on demand for the natural fiber.

China’s cotton reserves management company said it will suspend its sales from Dec. 1 based on the current market situation. The Cotton Outlook has scaled up its estimate for global production in 2021-22 (Aug-Jul) by 97,000 tn to 26.0 mln tn, the agency said in its November report.

The estimate has been revised upward as production in the African Franc zone and Turkey is expected to be higher. The agency has maintained its output estimate in the US at 3.92 mln tn. Global cotton ending stocks are estimated at 110,000 tn for the ongoing 2021-22 season.

Arrivals of cotton in spot markets were at 184,300 bales (1 bale = 170 kg), higher than 171,500 bales on Monday. Of the total quantity, around 10,000 bales arrived in Haryana, 2,800 in Punjab, and 17,000 bales in Rajasthan.

Arrivals were pegged at 42,000 bales in Gujarat, around 15,000 bales in Madhya Pradesh, and 44,000 bales in Maharashtra. In spot market, Cotton dropped by 250 Rupees to end at 31020 Rupees.

Trading Ideas:
–Cotton trading range for the day is 29620-31160.
–Cotton prices dropped after CAI stated the arrivals gain momentum.
–Pressure also seen weighed by worries over the likely impact of the Omicron coronavirus variant on demand for the natural fiber.
–China’s cotton reserves management company said it will suspend its sales from Dec. 1 based on the current market situation.
–In spot market, Cotton dropped  by 250 Rupees to end at 31020 Rupees.

Courtesy: Kedia Commodities

 

Source: Comodity Online

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