Technically Cotton market is under short covering as market has witnessed drop in open interest by 3.15% to settled at 2092 while prices up 80 rupees.
Now MCX Cotton is getting support at 30170 and below same could see a test of 29800 levels, and resistance is now likely to be seen at 30950, a move above could see prices testing 31360.
Cotton yesterday settled up by 0.26% at 30550 due to huge demand of the cotton from China, which is the largest importer of the cotton crop, as well as from the local spinning industry.
Prices rose amid farmers expecting the lowest production of cotton in the past five years due to the attack of pink bollworm pest in some parts, surplus rain in Haryana’s cotton belt in August and September months and overall less area under cotton crop in the region this year.
According to the Cotton Corporation of India (CCI) and the Indian Cotton Association Limited (ICAL), this year cotton was sown on total of 16.99 lakh hectares (LH) in north region, including 3.03 LH in Punjab, which has witnessed an increase of around 52,000 hectares this year against last year, 6.88 LH in Haryana, which is 49,000 hectares less than the last year, and 7.08 LH in Rajasthan, including 3.44 LH and 3.64 LH in upper and lower Rajasthan, respectively.
After the attack of pink bollworm in several parts of the cotton belt of the three states, damage due to rain, the expected production from these three states is around 52.89 lakh bales this year which would be around 10 lakh bales less than last year. In spot market, Cotton gained by 300 Rupees to end at 28860 Rupees.
Trading Ideas:
–Cotton trading range for the day is 29800-31360.
–Cotton prices gained due to huge demand of the cotton from China, which is the largest importer of the cotton crop, as well as from the local spinning industry.
–Prices rose amid farmers expecting the lowest production of cotton in the past five years due to the attack of pink bollworm pest in some parts
–Due to dip in production, local industry too wants to purchase as much cotton is available in the mandis.
–In spot market, Cotton gained by 300 Rupees to end at 28860 Rupees.
Courtesy: Kedia Commodities
Source: Comodity Online
