MCX Cotton under long liquidation; Resistance seen at 16140
Commodity Online | July 13 2020
UPDATED 12:00:10 IST

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Technically Cotton market is under long liquidation as market has witnessed drop in open interest by 2.82% to settled at 3863 while prices down 90 rupees.

Now MCX Cotton is getting support at 16040 and below same could see a test of 16000 levels, and resistance is now likely to be seen at 16140, a move above could see prices testing 16200.

Cotton yesterday settled down by 0.56% at 16090 as sowing has picked up pace across the country because of good rainfall, with nearly 92 lakh hectares coming under cultivation so far. Last season, farmers had completed sowing operations on 46 lakh hectares around the same period.

Cotton sowing is expected to cross 115-120 lakh hectares for the 2020-21 season, according to industry bodies. This year, sowing has doubled compared to the last year, according to agriculture ministry data.

Sowing began early this year since the monsoon began on time. In areas dependent on rainfall, sowing commences June onwards while in irrigated areas, it begins as early as April. As per the data available, cotton sowing is almost complete and reached last stages in Punjab, Haryana and Rajasthan.

In Haryana, cotton acreage has gone up by 9% to 7.37 lakh hectares. Higher area has been reported from Maharashtra (33.08 lakh hectares), Telangana (15.39 lakh hectares) Rajasthan (6.27 lakh hectares) Madhya Pradesh (5.40 lakh hectares), Karnataka (2.03 lakh hectares), Gujarat (15.71 lakh hectares), Punjab (5.01 lakh hectares) Haryana (7.37 lakh hectares), Andhra Pradesh (0.90 lakh hectares), Odisha (0.03 lakh hectares) and Tamil Nadu (0.02 lakh hectares).

Trading Ideas:
--Cotton trading range for the day is 16000-16200.
--Cotton prices dropped as sowing has picked up pace across the country because of good rainfall, with nearly 92 lakh hectares coming under cultivation so far
--Cotton sowing is expected to cross 115-120 lakh hectares for the 2020-21 season, according to industry bodies.
--As per the data available, cotton sowing is almost complete and reached last stages in Punjab, Haryana and Rajasthan.
--In spot market, Cotton gained  by 60 Rupees to end at 15910 Rupees.

Courtesy: Kedia Commodities