Cotton market under long liquidation; Support seen at 20183.4

0
135

Cotton prices ended with losses on profit booking after prices gained on weak sowing prospects in domestic markets. Cotton sowing for year 2016-17 has lagged behind by against the last year due to delay in monsoon whereas estimation of fall in cotton acreages could keep supply outlook weaker in upcoming season too. About cotton sowing stood lower at 1.9 million hectare as against 3.48 million hectares a year ago. Larger acreages of cotton are likely to shift to other cash crop especially pulses due to better realization expectations.

Also, total cotton acreages have tumbled by 27% in Punjab and Haryana as sowing has completed in these state. As per market sources, total cotton acreages in Punjab has dropped by 43.11% to 256,000 hectares in the 2016-17 crop year, from 450,000 hectare in the previous year. Similarly, cotton area coverage in Haryana fell by 14% to 500,000 hectares this year as against 580,000 hectares in 2015-16.

Moreover, in the kharif sowing progress data released by Government pegged only 9.87 lakh hectares in current season compared to 14.30 lakh hectares last year. Both the Union government and the trade expect cotton acreage to shrink by about 5-7 per cent over last year’s 118 lakh hectares (lh). Currently, CCI is actively auctioning cotton bales from its reserves to keep the supplies adequate. Technically market is under long liquidation as market has witnessed drop in open interest by -2.8% to settled at 5485 while prices down -10 rupee, now Cotton is getting support at 20183.4 and below same could see a test of 20056.7 level, and resistance is now likely to be seen at 20413.4, a move above could see prices testing 20516.7.

Trading Ideas:
–Cotton trading range for the day is 20057-20517.
–Cotton prices ended with losses on profit booking after prices gained on weak sowing prospects in domestic markets.
–Cotton sowing for year 2016-17 has lagged behind by against the last year due to delay in monsoon.
–As per market sources, total cotton acreages in Punjab has dropped by 43.11% to 256,000 hectares in the 2016-17 crop year.
–Cotton prices in spot market gained by 180.00 rupees and settled at 20520.00 rupees.

Courtesy: Kedia Commodities

LEAVE A REPLY