Technically Cotton market is under short covering as market has witnessed drop in open interest by 2.18% to settled at 4075 while prices up 210 rupees.
Now MCX Cotton is getting support at 31350 and below same could see a test of 31280 levels, and resistance is now likely to be seen at 31500, a move above could see prices testing 31580.
Cotton yesterday settled up by 0.67% at 31420 taking cues from a wider market rebound, as investors shrugged off worries over the Omicron coronavirus variant.
Sentiment was also buoyed by the December World Agricultural Supply and Demand Estimates (WASDE) report, which forecast global ending stocks at 85.73 million bales for the 2021/22 crop year, about 1.2 million bales lower than the previous month, citing lower output and slightly higher consumption.
But the report also slightly raised its U.S. production estimate to 18.28 million bales, while ending stocks estimates were unchanged at 3.40 million bales.
Meanwhile, the United States Department of Agriculture in another report announced net sales of 382,600 running bales, rose 2% from the previous week and 83% from the prior 4-week average.
Increases were primarily from China. Arrivals of cotton were at 177,500 bales, higher than 5,500 bales against 172,000 bales previous day. India’s cotton exports in the ongoing 2021-22 (Oct-Sep) marketing year have slowed due to higher prices in the domestic market, making overseas sales economically unviable.
In the ongoing marketing year, around 800,000 bales of cotton were exported till November, sharply lower than the previous year. In spot market, Cotton dropped by 70 Rupees to end at 31610 Rupees.
Trading Ideas:
–Cotton trading range for the day is 31280-31580.
–Cotton gains taking cues from a wider market rebound, as investors shrugged off worries over the Omicron coronavirus variant.
–WASDE forecast global ending stocks at 85.73 million bales for the 2021/22 crop year, about 1.2 million bales lower.
–The report also slightly raised its U.S. production estimate to 18.28 million bales.
–In spot market, Cotton dropped by -70 Rupees to end at 31610 Rupees.
Courtesy: Kedia Commodities
Source: Comodity Online