Commodities Analysis | AJAY KEDIA
Cotton yesterday settled down by -3.14% at 30820 as pressure seen after the UK-based Cotton Outlook has scaled up its estimate for global production in 2021-22 (Aug-Jul) by 97,000 tn to 26.0 mln tn, the agency said in its November report. The estimate has been revised upward as production in the African Franc Zone and Turkey is expected to be higher.
The agency has maintained its output estimate in the US at 3.92 mln tn. The outlook for cotton production in India, the largest producer, has been maintained at 6.17 mln tn. The production in China is seen at 5.71 mln tn. The agency maintained its estimate for global consumption in 2021-22 at 26.15 mln tn.
Global cotton ending stocks are estimated at 110,000 tn for the ongoing 2021-22 season. Arrivals of cotton in spot markets were at 184,300 bales (1 bale = 170 kg), higher than 171,500 bales on Monday. Of the total quantity, around 10,000 bales arrived in Haryana, 2,800 in Punjab, and 17,000 bales in Rajasthan.
Arrivals were pegged at 42,000 bales in Gujarat, around 15,000 bales in Madhya Pradesh, and 44,000 bales in Maharashtra. Nearly 10,000 bales arrived in Karnataka, 3,500 in Odisha, and 40,000 bales in Telangana and Andhra Pradesh combined. In spot market, Cotton dropped by -200 Rupees to end at 31420 Rupees.
Technically market is under long liquidation as the market has witnessed a drop in open interest by -2.95% to settled at 4765 while prices down -1000 rupees, now Cotton is getting support at 30480 and below same could see a test of 30150 levels, and resistance is now likely to be seen at 31370, a move above could see prices testing 31930.
# Cotton trading range for the day is 30150-31930.
# Cotton prices dropped as pressure seen after Cotton Outlook has scaled up its estimate for global production in 2021-22 by 97,000 tn to 26.0 mln tn
# Arrivals of cotton in spot markets were at 184,300 bales, higher than 171,500 bales on Monday
# Chief Minister M.K. Stalin urged Union Textiles Minister Piyush Goyal to remove the 11% import duty on cotton.
# In spot market, Cotton dropped by -200 Rupees to end at 31420 Rupees.