According to Angel Commodities ,We expect cotton prices may trade lower today on expectation of some corrections form higher levels. However, cotton supplies in spot markets have been dwindling while domestic textile units are ramping up purchases.
Angel Commodities report on Cotton
Cotton complex ends lower due to correction form higher levels on Tuesda y . NCDEX Kapas for Apr’17 closed 0.32 % down while MCX J un’16 cotton closed down by 0.31 %. However , steady demand from textile sector on limited supplies of quality cotton in the domestic market keeping prices higher .
Delayed arrival of monsoon could affect the cotton acreage in the key growing regions of Central and South India. Moreover, scare of pest attacks such as whitefly and pink bollworm, which caused major losses to farmers last year and the attempts by some St ate governments to wean away farmers from cotton could shrink the acreage of the fibre crop this kharif season.
Global Cotton Updates
ICE cotton futures fell for the fourth straight session on Tuesday on a stronger dollar coupled with strong crop progress in the U . S. The better – than – expected U.S. crop condition ratings caused “speculative liquidation in cotton. In latest USDA report for 2016/17, world production and beginning stocks are forecast down, due to lower production in China in both 2015 and 2016.
We expect cotton prices may trade lower today on expectation of some corrections form higher levels. However, cotton supplies in spot markets have been dwindling while domestic textile units are ramping up purchases. There will be renewed buying interest among market participants on reports of lesser sowing in north India.