MCX Cotton market under long liquidation
Commodity Online | September 21 2016
UPDATED 14:52:47 IST

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Cotton on MCX settled down by -0.34% at 20760 due to easing demand from traders and stockists at the spot market. Though, some losses were capped as recent rains in major producing belts of Gujarat may delay the arrival of new cotton crop. Fresh spell of rains in different parts of Gujarat has helped kharif sowing in the state to near 100 per cent as on September 19, 2016. Saurashtra, south and Central Gujarat has received good rains during the last few days. Cotton recorded 24,04,900 hectares of sowing, which is 15 per cent lower than normal 28,21,000 hectares. India' 2016-17 cotton production is expected to rise by 8.2% on increased yield in the country.

Total cotton output estimates for 2016-17 stood at 35.5 million bales as compared to 35.5 million bales previous year. Cotton yield for 2016-17 is expected to jump by 18% to 558 kilogram per hectare compared to year ago. However, domestic cotton consumption is seen unchanged at 27 million bales as compared to last year. Meanwhile, cotton exports for 2016-17 are expected to fall by 12% to 6 million bales as compared to previous year. Cotton production in north zone is estimated at 4 million bales as compared to 3.6 million bales with yield at 597 kilogram as compared to 526 million bales last year.

Cotton production in Central India is estimated at 21 million bales as compared to 18.1 million bales with yield at 509 kilogram per hectare as compared to 2.75 kilogram per hectare last year. Technically market is under long liquidation as market has witnessed drop in open interest by -0.11% to settled at 3755 while prices down -70 rupee, now Cotton is getting support at 20614 and below same could see a test of 20467 level, And resistance is now likely to be seen at 20944, a move above could see prices testing 21127.

Trading Ideas:

--Cotton trading range for the day is 20467-21127.

--Cotton prices ended with losses due to easing demand from traders and stockists at the spot market.

--Though, some losses were capped as recent rains in major producing belts of Gujarat may delay the arrival of new cotton crop.

--Fresh spell of rains in different parts of Gujarat has helped kharif sowing in the state to near 100 per cent as on September 19, 2016.

--Cotton prices in spot market gained by 450.00 rupees and settled at 23060.00 rupees.

Courtesy: Kedia Commodities