Technically Cotton market is under short covering as market has witnessed drop in open interest by 2.8% to settled at 1802 while prices up 630 rupees.
Now MCX Cotton is getting support at 30540 and below same could see a test of 29850 levels, and resistance is now likely to be seen at 31710, a move above could see prices testing 32190.
Cotton yesterday settled up by 2.06% at 31240 as Cotton Association of India (CAI), a body of traders, has reduced its estimate of the cotton crop last season (October 2020- September 2021) to 353 lakh bales (each 170 kg) from its previous estimate of 354.5 lakh bales. The final estimate is about 7 lakh bales lower than the 360 lakh bales of crop estimated initially.
The total cotton availability for the year is estimated at 488 lakh bales, including an opening stock of 125 lakh bales and import of 10 lakh bales besides the 353 lakh bales of crop.
As per the CAI’s cotton balance-sheet for the year, the closing stock is estimated to be 75 lakh bales, which is lower than last year’s estimated 107.5 lakh bales of carryover stock.
CAI has increased its cotton consumption estimate for the year by 5 lakh bales to 335 lakh bales from last year’s estimated consumption of 250 lakh bales, showing an increase of 34 per cent over last year.
The U.S. Department of Agriculture’s (USDA) latest weekly export sales report showed a 41% drop from the previous week in net sales for 2021/2022. In spot market, Cotton dropped by 110 Rupees to end at 29450 Rupees.
Trading Ideas:
–Cotton trading range for the day is 29850-32190.
–Cotton gained as Cotton trade body trims 2020-21 crop estimate to 353 lakh bales
–CAI has increased its cotton consumption estimate for the year by 5 lakh bales to 335 lakh bales
–USDA latest weekly export sales report showed a 41% drop from the previous week in net sales for 2021/2022.
–In spot market, Cotton dropped by 110 Rupees to end at 29450 Rupees.
Courtesy: Kedia Commodities
Source: Comodity Online
