Fresh buying seen in MCX Cotton; Support seen at 20656
Commodity Online | September 20 2016
UPDATED 15:24:32 IST

NCDEX Chana under fresh buying; Support seen at 5056

MCX Cotton under fresh buying; Support seen at 17950

NCDEX Jeera under fresh selling; Resistance seen at 14140

NCDEX Turmeric under fresh selling; Support seen at 5844

MCX Mentha Oil likely to move in a range of 935.3-958.9

Cotton on MCX settled up by 1.61% at 20830 on lower production estimates for 2016-17due to weak sowing in the country. Weak sowing activity has resulted in lower output estimates. Weak rains in Gujarat, Telangana and Andhra Pradesh hit India's cotton acreage which fell by 11.27% to 10.22 million hectare until Sep 16. India's cotton output for 2016-17 is expected to fall by 2% on delayed arrival of monsoon rains 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 26.50 million bales (1 bale = 480lb) as compared to previous month's forecast of 27 million bales.

Cotton production in India, the world's top grower, will recover less rapidly than previously thought, as weak rains limit yield recovery, US officials say. Yields will tick up, after a decent monsoon across many areas, but by barely by enough to outweigh the sharp drop in sowings. "Despite a generally good monsoon, below normal rains in some cottonspecific growing areas is expected to lead to yields that are lower than the USDA official forecast," the USDA's Delhi bureau warned. The US Department of Agriculture's bureau in New Delhi saw the country's cotton crop at 26.50m bales, barely higher than the six-year lows touched last season.

Technically market is under fresh buying as market has witnessed gain in open interest by 2.59% to settled at 3759 while prices up 330 rupee, now Cotton is getting support at 20656 and below same could see a test of 20483 level, And resistance is now likely to be seen at 20936, a move above could see prices testing 21043.

Trading Ideas:

--Cotton trading range for the day is 20483-21043.

--Cotton prices gains on lower production estimates for 2016-17due to weak sowing in the country.

--Weak rains in Gujarat, Telangana and Andhra Pradesh hit India's cotton acreage which fell by 11.27% to 10.22 million hectare until now.

--India's fibre output for 2016-17 estimated at 26.50 million bales as compared to previous month's forecast of 27 million bales.

--Cotton prices in spot market gained by 600.00 rupees and settled at 22610.00 rupees.

Courtesy: Kedia Commodities