Technically Cotton market is under long liquidation as market has witnessed drop in open interest by 6.29% to settled at 3323 while prices down 50 rupees.
Now MCX Cotton is getting support at 22260 and below same could see a test of 22190 level, And resistance is now likely to be seen at 22420, a move above could see prices testing 22510.
Cotton on MCX settled down by 0.22% at 22340 on profit booking after prices gained due lower production expectation this year, delayed arrivals from Gujarat & Maharashtra and strong export demand. As per government’s sowing report, cotton has been sown in 122.38 lakh ha, lower than 124.29 lakh ha sown last year till date but higher than normal kharif area of 119.75 lakh ha on date.
Scanty rainfall in Gujarat & an attack of pink bollworms. In Maharashtra & Telangana are expected to squeeze the cotton crop yields. As a result, the Cotton Association of India (CAI) has pegged cotton production in 2018-19 to fall 4.7% from the previous season’s 365 lakh bales to 348 lakh bales.
Increased demand from China, Bangladesh and Vietnam and the opening up of the Pakistan market for Indian cotton could firm up prices further. The Pakistan government is expected to lift import duty of 5 per cent by next week.
As per the latest update by International Cotton Advisory Committee (ICAC), global cotton area is currently projected to decrease by 2% to 33.4 million hectares during 2018/19.
Global yields are expected to decline by 1% to 777 kg per hectare, remaining close to the 10-year average of 770 kg per hectare. As per CAI, India’s forward export contracts of cotton have more than doubled from about 7 lakh bales in September 2017, driven by increased demand from China.
–Cotton trading range for the day is 22190-22510.
–Cotton dropped on profit booking after prices gained due lower production expectation this year, delayed arrivals and strong export demand.
–As per government’s sowing report, cotton has been sown in 122.38 lakh ha, lower than 124.29 lakh ha sown last year till date.
–CAI has pegged cotton production in 2018-19 to fall 4.7% from the previous season’s 365 lakh bales to 348 lakh bales.
–Cotton prices in spot market dropped by 20.00 rupees and settled at 22170.00 rupees.