MCX Cotton under fresh selling; Support seen at 16170
Commodity Online | March 26 2020
UPDATED 12:00:10 IST

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Technically Cotton market is under fresh selling as market has witnessed gain in open interest by 4.4% to settled at 6026 while prices down 20 rupees.

Now MCX Cotton is getting support at 16170 and below same could see a test of 15860 levels, and resistance is now likely to be seen at 16870, a move above could see prices testing 17260.

Cotton yesterday settled down by 0.12% at 16470 on short covering after prices dropped as slowing business activities across the globe due to the coronavirus pandemic heightened fears of sluggish demand for the natural fiber.

The Centre will spend 1,061 crore to reimburse the Cotton Corporation of India (CCI) and its sub-agent in Maharashtra for procuring cotton at the minimum support price in that State since 2014.The agriculture department has started creating awareness among the farmers about pink bollworm attack on cotton crops.

According to a spokesman of agriculture department, pink bollworm goes in winter nap during November and December and its eggs remain present on cotton seeds, branches and dried leafs in farms and ginning factories.

The Cotton Corporation of India (CCI) has stated that cotton procurement at MSP will continue across markets. However, farmers are still holding onto their crops seeking better prices and also due to the directives issued by the district collectors to avoid crowds.

Meanwhile, the United States Department of Agriculture reported net sales of 214,600 running bales (RB) for 2019/2020, which included 39,600 RB sales to China.

The International Cotton Advisory Committee expects global prices of cotton to rise due to lower ending stock in 2019-20 (Aug-Jul), the committee said in its report.The agency forecast global cotton ending stocks to decline to 18.0 mln tn from 18.27 mln tn estimated the previous month.

Trading Ideas:
--Cotton trading range for the day is 15860-17260.
--Cotton gained on short covering after prices dropped as slowing business activities across the globe due to the coronavirus pandemic heightened fears of sluggish demand.
--The Centre will spend 1,061 crore to reimburse the CCI and its sub-agent in Maharashtra for procuring cotton at the minimum support price in that State since 2014.
--The International Cotton Advisory Committee expects global prices of cotton to rise due to lower ending stock in 2019-20 (Aug-Jul).
--Corona virus is affecting the global trade and world economies

Courtesy: Kedia Commodities