Technically Cotton market is under long liquidation as market has witnessed drop in open interest by 3.9% to settled at 3864 while prices down 50 rupees.
Now MCX Cotton is getting support at 15620 and below same could see a test of 15450 levels, and resistance is now likely to be seen at 15910, a move above could see prices testing 16030.
Cotton yesterday settled down by 0.32% at 15780 on profit booking after prices seen supported by export sales data that showed purchases of the natural fiber by top consumer China.
The United States Department of Agriculture's weekly export sales report showed net sales of 238,100 running bales for 2019/2020, down 36% from the previous week, but up 50% from the prior four-week average, primarily driven by China and Vietnam.
Overall fundamentals for the market remain bleak as the coronavirus pandemic dampened global demand for the natural fiber and apparel, with recent U.S.-China trade friction also hurting sentiment.
The United States Department of Agriculture (USDA) in its latest World Agricultural Supply and Demand Estimates (WASDE) report projected U.S exports to rise to 16 million bales in the 2020/21 marketing year, compared to its estimate of 15 million bales for 2019/20.
U.S. production was seen at 19.5 million bales- 400,000 bales less than the year before. Cotton procurement has begun in Nagpur’s cotton procurement centre at MIDC Butibori amidst the ongoing nationwide lockdown against COVID-19.
Labourers were seen procuring cotton with proper care and maintaining social distancing. However, due to shortage of labour, procurement operations at the facility are underway at a slow pace.
--Cotton trading range for the day is 15450-16030.
--Cotton dropped on profit booking after prices seen supported by export sales data that showed purchases of the natural fiber by China.
--Cotton World production for 2020/21 was projected at 118.95 million bales; down from the 2019/20 estimate of 122.67 million bales
--Cotton procurement has begun in Nagpur’s cotton procurement centre at MIDC Butibori amidst the ongoing nationwide lockdown.
--Corona virus is affecting the global trade and world economies
Courtesy: Kedia Commodities