Cotton on MCX settled up 0.45% at 22570 as USDA estimates that global stockpiles will drop by 9 million bales to 91.29 million bales by July 2017, which are 3.4 million bales lower than the previous estimate. Besides, rising demand from domestic mills also fuelled the uptrend. News of pest attack on standing cotton crop in some district of Punjab and Haryana may prompt speculators to build fresh long positions.
Total cotton sowing area in Gujarat has lagged behind by 16% Y/Y as about 2.18 million hectares land sown under cotton till Aug 1 against the 2.50 million hectares of last year, according to latest sowing data released by Ministry of Agriculture, Government of India, cotton is planted in an area of 9.23 million hectares as on July 29 2016 against 10.19 million hectares planted in the same period last year. In global market, For the 2016-17 marketing year, which began Aug 1, the US Department of Agriculture reported weekly US exports of 226,700 bales of cotton, a 25% increase from the previous week and 10% jump from the prior four-week average.
Also, more than half the world’s stockpiles are held by China, which has been auctioning the fibre into its local market. China plans to increase its daily offer rate of 30,000 tons a day in September. Technically market is under short covering as market has witnessed drop in open interest by -8.87% to settled at 4091 while prices up 100 rupee, now Cotton is getting support at 22453.4 and below same could see a test of 22336.7 level, and resistance is now likely to be seen at 22733.4, a move above could see prices testing 22896.7.
–Cotton trading range for the day is 22337-22897.
–Cotton prices ended with gains as USDA estimates that global stockpiles will drop by 9 million bales to 91.29 million bales by July 2017.
–Total cotton sowing area in Gujarat has lagged behind by 16% Y/Y as about 2.18 million hectares land sown under cotton.
–For the 2016-17 marketing year, USDA reported weekly US exports of 226,700 bales of cotton, a 25% increase from the previous week.
–Cotton prices in spot market gained by 170.00 rupees and settled at 22740.00 rupees.
Courtesy: Kedia Commodities