Technically Cotton market is under long liquidation as market has witnessed drop in open interest by 9.99% to settled at 2991 while prices down 180 rupees.
Now MCX Cotton is getting support at 15790 and below same could see a test of 15670 levels, and resistance is now likely to be seen at 16040, a move above could see prices testing 16170.
Cotton yesterday settled down by 1.12% at 15920 as plans by Indian farmers to plant a record amount of cotton this season will pile fresh pressure, already hard hit by the coronavirus pandemic.
The Cotton Corporation of India (CCI), the government agency which is presently holding close to one third of the country's cotton stocks, has slashed the price of its cotton to promote sales.
This has made domestic cotton cheaper than the imported cotton, however, large availability of cotton in the current year and forecast of a big crop ahead has kept the buying subdued.
CCI and its agencies have procured 1.25 crore bales of cotton in the current year, which is close to one third of the cotton arrivals in the country.
Cotton industry and trade had been demanding that the CCI slash its rates, while CCI had refused to oblige, saying it had quoted the right price for its premium quality cotton.
The government raised MSP of medium staple cotton by Rs 442 to Rs 9,376 a bale. Also, the minimum threshold of long staple cotton was raised by Rs 468 to Rs 9,903 a bale.
In a major relief to cotton growers, the Cotton Corporation of India has filed an affidavit before the Aurangabad bench of the Bombay High Court stating that cotton would be purchased from farmers till September 30.
--Cotton trading range for the day is 15670-16170.
--Cotton prices dropped as plans by Indian farmers to plant a record amount of cotton this season will pile fresh pressure.
--Cotton textile exports slumped by 64% in two months during lockdown
--Export of cotton textiles during March to May 2020 would be very low and insignificant on account of the outbreak of COVID-19.
--Corona virus is affecting the global trade and world economies
Courtesy: Kedia Commodities