MCX Cotton under fresh buying; Resistance seen at 20710

Technically Cotton market is under fresh buying as market has witnessed gain in open interest by 7.96% to settled at 11698 while prices up 130 rupees.

Now MCX Cotton is getting support at 20530 and below same could see a test of 20420 level, And resistance is now likely to be seen at 20710, a move above could see prices testing 20780.

Cotton on MCX settled up by 0.63% at 20630 on reports of lower than expected production prospects in the country. India’s cotton production is expected to dip by 7% due to insufficient rainfall in major growing regions.

The International Cotton Advisory Committee (ICAC) recently stated that India’s cotton production is expected to dip by 7% due to insufficient rainfall in major growing regions, reports said. Adverse climatic conditions and water shortage coupled with a static growing area are set to knock India off its No 1 perch in cotton production worldwide, report added.

As per the latest international reports, India will lose its top cotton producer tag to China for the year 2018-19, which has shown improved yields with better farming practices. Cotton output in China is expected to increase by about 1% to 5.94 million tons this year.

According to Cotton Association of India (CAI), India’s cotton output is expected to dip at 33.5 million bales for 2018-19, lowest since 2010-11, when it reported 33.225 million bales.

CAI trimmed 2018-19 cotton output to 33.5 million bales of 170 kg each as farmers have uprooted nearly 70% plants in Gujarat, Maharashtra and Telangana due to moisture stress. CAI lowered Gujarat’s cotton crop estimate by 150,000 bales and Maharashtra and Telangana by 200,000 bales each.

Trading Ideas:
–Cotton trading range for the day is 20420-20780.
–Cotton prices gained on reports of lower than expected production prospects in the country.
–India’s cotton production is expected to dip by 7% due to insufficient rainfall in major growing regions.
–ICAC stated that India’s cotton production is expected to dip by 7% due to insufficient rainfall in major growing regions.
–Cotton prices in spot market dropped by 130.00 rupees and settled at 20240.00 rupees.

Courtesy: Kedia Commodities