Technically Cotton market is under long liquidation as market has witnessed drop in open interest by 4.92% to settled at 9390 while prices down 200 rupees.
Now MCX Cotton is getting support at 20890 and below same could see a test of 20770 level, And resistance is now likely to be seen at 21190, a move above could see prices testing 21370.
Cotton on MCX settled down by 0.94% at 21020 tracking weakness in spot demand and due to drop in export demand. Cotton Association of India expects cotton exports to fall 27% to 5 million bales this season ending September against 6.9 million bales registered last year due to lower domestic output this year.
In its latest estimate CAI has reduced cotton output for this year to 32.8 million bales against 33 million bales estimated in January.Last year, the output was pegged at 36.5 million bales.
Total production of cotton is likely to decline over 11% to 32.8 million bales for the 2018-19 season, mainly due to deficient rainfall in key growing areas, the Cotton Association of India (CAI) said in a report. In 2017-18, total cotton output was 36.5 million bales, the report said.
In 2018/19, production of Cotton is estimated at 300.9 lakh bales (of 170 kg each), down about 7.4% compared to previous estimate of 324 lakh bales as per latest government advance estimates. However, FAS Mumbai estimates marketing year (MY) 2018/19 production at 27.3 million 480-lb bales (35 million 170-kg bales/6 mt), which is 300,000 480-lb bales higher than the official USDA estimate.
In its latest press release, CAI cuts 2018-19 production estimate further by 5 lakh bales to 330 lakh bales for the year 2018- 19 however, higher imports of 27 lakh bales (15) and lower exports of 50 lakh bales (Vs 69) for 2018/19 season is bearish.
--Cotton trading range for the day is 20770-21370.
--Cotton prices dropped tracking weakness in spot demand and due to drop in export demand.
--CAI expects cotton exports to fall 27% to 5 million bales this season ending September against 6.9 million bales registered last year
--Total production of cotton is likely to decline over 11% to 32.8 million bales for the 2018-19 season, mainly due to deficient rainfall in key growing areas
--Cotton prices in spot market gained by 40.00 rupees and settled at 20910.00 rupees.
Courtesy: Kedia Commodities