Cotton market is under long liquidation as market has witnessed drop in open interest by 11.07% to settled at 1519 while prices down 150 rupees.
Now Cotton is getting support at 21693.4 and below same could see a test of 21636.7 level, And resistance is now likely to be seen at 21853.4, a move above could see prices testing 21956.7.
Cotton on MCX settled down 0.68% at 21750 amid pick up in arrivals however domestic demand was subdued. Deficient rains in cotton growing regions will hamper the yield for the kharif 2018-19 season, resulting in lower overall output of fibre crop.
Farmers, therefore, have pinned their hopes on increased cotton prices to make most from this kharif season. Gujarat, Maharashtra and Karnataka, which produce about half of the country’s cotton, faced water shortage due to erratic monsoon during the sowing period. The Bt seeds, used in most of the cotton fields, require adequate water.
A deficient rainfall has adversely affected the yield of Bt cotton. Farmers in Gujarat – the largest grower of the fibre crop – fear picking cycles to come down from normal 4-5 to merely one or two this year.
The Centre, in its first advance estimate in September 2018, projected lower cotton crop at 325 lakh bales (each of 170 kg), about seven per cent lesser than 349 lakh bales estimated in fourth advance estimate for 2017-18.
The Cotton Association of India (CAI) has projected total cotton supply for 2018-19 upto September 30, 2019 at 390.25 lakh bales, including opening stock of 23 lakh bales and imports of 24 lakh bales, higher by nine lakh bales compared 15 lakh bales estimated for 2017-18.
–Cotton trading range for the day is 21640-21960.
–Cotton prices dropped on profit booking after prices gained on expectation of lower production this year.
–Deficient rains in cotton growing regions will hamper the yield for the kharif 2018-19 season, resulting in lower overall output of fibre crop.
–Gujarat, Maharashtra and Karnataka, which produce about half of the country’s cotton, faced water shortage due to erratic monsoon during the sowing period.
–Cotton prices in spot market gained by 60.00 rupees and settled at 21950.00 rupees.