Technically Cotton market is under fresh buying as market has witnessed gain in open interest by 6.09% to settled at 3067 while prices up 290 rupees.
Now NCDEX Cotton is getting support at 31180 and below same could see a test of 30690 levels, and resistance is now likely to be seen at 31980, a move above could see prices testing 32290.
Cotton yesterday settled up by 0.92% at 31680 amid low production, rising demand and supply constraints. Currently, raw cotton prices in various markets across the country are ruling above ?7,000 a quintal against the MSP of ?5,726 fixed for this year.
Prices much above MSP means the CCI will not need to do any market intervention this year. Prices are moving up since the cotton balance sheet is tight and ending stocks are lower. Except China, no other country seems to have ample stocks.
Cotton exports could be lower at 50 lakh bales this season (October 2021-September 2022) compared with 75-80 lakh bales last season.
SIMA said the Committee on Cotton Production and Consumption (CCPC) had pegged the carryover stocks at 120 lakh bales and if additional 10-15 lakh bales of cotton would have been consumed or exported, ending stocks could be 105 lakh bales.
SIMA said cotton production this year is estimated to be 360 lakh bales (170 kg) and if the carryover stocks are pegged at 100 lakh bales and imports at 10 lakh bales, the industry would have a total supply of 470 lakh bales.
According to estimates of CAI, a trade body, the carryover stocks are estimated at 82.50 lakh bales. In spot market, Cotton gained by 60 Rupees to end at 30570 Rupees.
Trading Ideas:
–Cotton trading range for the day is 30690-32290.
–Cotton prices remained supported amid low production, rising demand and supply constraints.
–Projections of tight supplies later this season leave industry worried
–Indian cotton exports will be reduced by 35 per cent from 78 lakh bales (last year) to around 45-50 lakh bales this year
–In spot market, Cotton gained by 60 Rupees to end at 30570 Rupees.
Courtesy: Kedia Commodities
Source: Comodity Online
