MCX Cotton likely to move in a range of 21513-22093

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Cotton on MCX settled down by -0.37% at 21800 due to weak demand from traders and stockists at the spot market. Currently the prices were under pressure due to poor buying interest from textile mills as CCI has decided to sell procured cotton. The Cotton Advisory Board (CAB) has lowered crop production estimate by 12 % to 338 lakh bales (lb) in 2015-16 against 386 lb last year but estimated a comfortable cotton supply position of 43 lb for the cotton season of 2015-16. Cotton sowing in Gujarat, major fibre producing state, slumped by 20% to 2.42 million hectares up-till Jul 25 on late arrivals of monsoon.

Total cotton sowing till Jul 25 at 2.42 million hectares compared to previous year sowing of 2.03 million hectares with rainfall average at 25.92% as compared to 30.99% previous year. Cotton sowing in Amreli up till Jul 25 at 355,800 hectares compared to 326,800 hectares a year ago with rainfall average at 30.86% as compared to 78.52% same period last year. Fibre planting in Surendranagar up till Jul 25 at 266,500 hectares compared to 287,100 hectares a year earlier with rainfall average at 16.88% as compared to 34.25% same period last year.

Cotton sowing in Rajkot up till Jul 25 at 253,700 hectares compared to 209,900 hectares previous year with rainfall average at 15.55% as compared to 50.88% same period last year. Technically market is under long liquidation as market has witnessed drop in open interest by -44.11% to settled at 261 while prices down -80 rupee, now Cotton is getting support at 21656 and below same could see a test of 21513 level, And resistance is now likely to be seen at 21946, a move above could see prices testing 22093.

Trading Ideas:
–Cotton trading range for the day is 21513-22093.
–Cotton prices ended with losses due to weak demand from traders and stockists at the spot market.
–Currently the prices were under pressure due to poor buying interest from textile mills as CCI has decided to sell procured cotton.
–Cotton sowing in Gujarat, major fibre producing state, slumped by 20% to 2.42 million hectares up-till Jul 25 on late arrivals of monsoon.
–Cotton prices in spot market gained by 10.00 rupees and settled at 22530.00 rupees.

Courtesy: Kedia Commodities

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