Technically Cotton market is under short covering as market has witnessed drop in open interest by 4.58% to settled at 1856 while prices up 190 rupees.
Now MCX Cotton is getting support at 25110 and below same could see a test of 24860 levels, and resistance is now likely to be seen at 25580, a move above could see prices testing 25800.
Cotton yesterday settled up by 0.76% at 25350 as cotton acreage this year is lower by 5.75 per cent at 119.66 lakh hectares, as per Agriculture Ministry’s latest data.
The new cotton crop has begun arriving in northern markets, Karnataka and Telangala with prices of kapas (raw cotton) ruling at least 10 per cent higher than the minimum support price (MSP) levels fixed by the Centre for the new season starting October.
The overall crop condition is good as on date and, based on the feedback from the 10 growing States, the yield will be much higher this year and quality very good.
The demand is slow as most of the spinning mills have covered their needs till December. If the moisture comes down, demand may improve over the next couple of weeks.
The latest spell of heavy rains in Gujarat may appear to have saved the State from sinking into a drought, but for the current kharif crops such as cotton, it has pushed back the harvest period by at least 15 days and also weakened the prospects of kharif groundnut due to waterlogging.
In September WASDE report, the USDA projected U.S. production at 18.5 million bales, 1.2 million bales higher than the previous month. In spot market, Cotton dropped by 70 Rupees to end at 26490 Rupees.
Trading Ideas:
–Cotton trading range for the day is 24860-25800.
–Cotton prices gained Cotton acreage this year is lower by 5.75 per cent at 119.66 lakh hectares
–The new cotton crop has begun arriving in northern markets, Karnataka and Telangala
–The overall crop condition is good as on date and, based on the feedback from the 10 growing States
–In spot market, Cotton dropped by 70 Rupees to end at 26490 Rupees.
Courtesy: Kedia Commodities
Source: Comodity Online
