Cotton to trade lower on soft demand

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Cotton futures at MCX trading at 21820 per bales, unchanged comparing its prior close. Prices to trend bearish on lack of demand seen in spot market by millers and traders.

Moreover, limited supply in the local market likely to limit fall in Cotton till Rs.21200 while Rs.23000 could react as immediate cap for the prices. Global crises in Cotton production lead prices to surges almost 20% in last month.

Farmers, having stocks are waiting for good rates to supply the production to gain maximum gain from the hike.

Fresh short positions has been built and speculators are widening their short position indicates downside is expected further for short term. Open interest for the month of October at MCX stood near 3577 lot.

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