India: MCX Cotton negative; support 17400

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“The commodity has support at 17400 while 18350 is the resistance. Traders are advised to sell around 18100 with the stop loss of 18350 for targets 17600 and 17400,” said Milan Shah, Research Analyst at Commodity Online.

MUMBAI (Commodity Online): Cotton futures for April delivery on India’s Multi Commodity Exchange (MCX) looks negative and short covering is expected at current levels.

“The commodity has support at 17400 while 18350 is the resistance. Traders are advised to sell around 18100 with the stop loss of 18350 for targets 17600 and 17400,” said Milan Shah, Research Analyst at Commodity Online.

MCX cotton for April delivery was down by 2.95 percent at Rs.17740 per bales as of 11.00 AM IST on Tuesday.

Cotton prices are expected to trade negative for short term on subdued export demand and hopes the state run Cotton Corporation of India (CCI) would release its stocks.

Government agencies have procured 2.5 mn to 3 mn bales of cotton and may start releasing the stocks in the current month, according to the sources.

“Fresh export deals have not been signed from India because of uncompetitive prices in the global market. Indian cotton is expensive as of now,” Prerana Desai, vice-president of research at Kotak Commodities said to Reuters.

Cotton supply across the spot markets of India are at around 100,000 bales per day, down from 200,000 bales in February.

Cotton supply was at 26.19 mn bales between October 1 and April 7, down from last year’s 26.84 mn bales.

Global updates

China is expected to import 16.5 mn bales of cotton in 2012-13, up by 1.5 mn bales from previous month’s estimates.

Cotton exports by African nations, Burkina Faso and Mali are estimated at 975,000 bales and 900,000 bales in 2012-13, up 63 % and 44 %, respectively against last year’s exports, according to the data released by USDA.

Source: commodityonline.com

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