Technically MCX Cotton is under long liquidation as market has witnessed drop in open interest by -1.41% to settled at 4552 while prices down -20 rupees.
Now Cotton is getting support at 19823.4 and below same could see a test of 19656.7 level, And resistance is now likely to be seen at 20193.4, a move above could see prices testing 20396.7.
Cotton on MCX settled down -0.1% at 19990 due to good progress in cotton sowing in the country. As per latest data from Agricultural Ministry, cotton is planted in 71.8 lakh hectares (l ha) till last week, higher by 5.8% compared to last year acreage of 68 lakh ha for same period.
However, there is fear of decline in yield due to deficient rainfall in major growing areas. Moreover, expectation of good physical demand for cotton as GST on cotton is less than manmade fibers also supported prices.
As per IMD, the middle-northern and eastern parts of India received above-normal rainfall, the western and southern parts remained deficient last year, with reports of deficient rainfalls in large cotton-growing regions.
US Department of Agriculture's Foreign Agricultural Services has raised its forecast for India's cotton production in 2017-18 (Aug-Jul) to 37.2 mln bales (1 bale = 170 kg) from 35.9 mln bales estimated in June.
The area under cotton across the country reached around 4.6 mln ha, compared with 1.91 mln ha a year ago, according to data released by the agriculture ministry. "With the timely onset of the monsoon and prospects for normal rainfall, yields are expected to be higher in most of the cotton growing states," the agency said in a report.
The yield for 2017-18 crop is estimated to be around 549 kg per hectare compared with 530 kg projected by USDA last month.
--Cotton trading range for the day is 19657-20397.
--Cotton prices ended with losses due to good progress in cotton sowing in the country.
--Cotton is planted in 71.8 lakh hectares (l ha) till last week, higher by 5.8% compared to last year acreage of 68 lakh ha for same period.
--US Department of Agriculture's Foreign Agricultural Services has raised its forecast for India's cotton production in 2017-18 to 37.2 mln bales.
--Cotton prices in spot market dropped by 140.00 rupees and settled at 20250.00 rupees.
Courtesy: Kedia Commodities