Cotton on MCX settled up by 0.84% at 20500 due to rising demand from traders and stockists at the domestic spot market. Though, expectation of better production as acreage have improved in major growing regions of Gujarat and Maharashtra, capped some gains. Increasing cheaper import supply from Australia and IMD forecast of heavy rain for next 3 days in western part of Gujarat is likely to restrict the gains. Millers ramped up import of fibre from African countries and Australia after the sharp gains in domestic cotton prices.
USDA raised India’s imports to 1 million bales from 950,000 bales as compared to previous estimates. Also, in China another steady turnover of just over 57% of the catalogue (30,068 tons of domestic lots) on offer was recorded in latest auction. The actual quantity sold was 17,141 tons, raising the cumulative amount in the auction series to date, allowing for adjustments, to 1.85 tons, consisting of 1.55 tons of domestic lots and the balance (296,306) of imported cotton. However, China cotton association forecasted total cotton output in China for year 2016-17 is likely to fall by 4.4% on year.
.Meanwhile, India’s cotton output for 2016-17 is expected to fall by 2% on delayed arrival of monsoon in the country, US department of agriculture (USDA) said in its World Agricultural Supply and Demand Estimates (WASDE) report. India’s fibre output for 2016-17 estimated at 27 million bales as compared to previous month’s forecast of 27.50 million bales.Technically market is under short covering as market has witnessed drop in open interest by -1.7% to settled at 3576 while prices up 170 rupee, now Cotton is getting support at 20364 and below same could see a test of 20227 level, And resistance is now likely to be seen at 20604, a move above could see prices testing 20707.
–Cotton trading range for the day is 20227-20707.
–Cotton prices gained due to rising demand from traders and stockists at the domestic spot market.
–Though, expectation of better production as acreage have improved in major growing regions of Gujarat and Maharashtra, capped some gains.
–USDA raised India’s imports to 1 million bales from 950,000 bales as compared to previous estimates.
–Cotton prices in spot market dropped by 160.00 rupees and settled at 22030.00 rupees.