Expect Cotton futures to trade sideways: Karvy Commodities

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Karvy Commodities report on Cotton

Cotton

Cotton and Kapas futures traded higher by end of the week as short  supply of  good quality of cotton amid increasing off take by millers supported uptrend of  cotton prices at futures platform . Rolling over of open positions was seen for  near month cotton contract at MCX as total open interest fell by 7% whereas  prices move d up by 0.4% to Rs.17370/bales on Friday. Likewise, June delivery  cotton contract closed at Rs.17580/bales, up by 0.46%.

Similarly, cotton prices rose in spot market too on account of fresh buying  amid tight supply on good quality of cotton stocks. Gujarat  Shankar – 6  cotton  hovered at 35300/candy at Rajkot.

The Benchmark Kapas contract at NCDEX gained 0.62% to Rs.889.50/ 20kg  on increasing buying interest from ginners whereas NCDEX near month cocud  contract closed at Rs.2245/quintal, higher by 0.18% from th e previous close.

At global front, ICE cotton rebound on higher weekly export sale amid rising  buying interest for both season crops. Moreover, reports on rising possibilities  of area shifting from cotton to soybean also supported uptrend of ICE cotton  on  Friday. July delivery cotton contract settled at 61.67 cent/lb, up by 0.98%  from the previous close.

The benchmark of global cotton prices Cotlook A index fell by 1.2% to 69.35  on Friday.

Outlook

Cotton and Kapas futures are likely to trade sideways during today’ s session on account of changin g short term fundamentals of  the commodity. Cotton prices showed upward movement during last week as emerging buying interest from traders amid  shrinking supply of cotton arrivals proved enough to keep cotton prices higher.

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