MCX Cotton expected to trade 21357-22517 levels

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Cotton settled up by 0.32% at 21990 amid profit booking due to limited demand from domestic mills. Though, weak arrivals from major producing belts of Punjab and Haryana due to whitefly pest attack, capped some losses in cotton. According to the International Cotton Advisory Committee (ICAC), global area under cotton is expected to contract by one per cent to 31 million hectares in 2016-17, the area in India is expected to expand by one per cent to 12 million hectares in 2016-17.

Globally, the average yield is projected to improve by five per cent to 735 kg per hectare, which would cause production to increase by five per cent to 23 million tons. In India, cotton production is expected to increase by eight per cent to 6.3 million tons and better monsoons may boost yield by six per cent to 521 kg per hectare, though pest pressure remains a concern.

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.

Trading Ideas:

–Cotton trading range for the day is 21357-22517.

–Cotton prices ended with losses amid profit booking due to limited demand from domestic mills.
–Though, weak arrivals from major producing belts of Punjab and Haryana due to whitefly pest attack, capped some losses in cotton.

–Global area under cotton is expected to contract by one per cent to 31 million hectares in 2016-17.

–Cotton prices in spot market gained by 110.00 rupees and settled at 21820.00 rupees.

Courtesy: Kedia Commodities

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