MCX Cotton under long liquidation; Resistance seen at 24540
Commodity Online | June 11 2021
UPDATED 12:05:50 IST

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Technically Cotton market is under long liquidation as market has witnessed drop in open interest by 7.8% to settled at 4729 while prices down 280 rupees.

Now MCX Cotton is getting support at 23940 and below same could see a test of 23650 levels, and resistance is now likely to be seen at 24540, a move above could see prices testing 24850.

Cotton yesterday settled down by 1.14% at 24220 on profit booking after prices gained amid prospects of higher exports and falling supply in physical markets. Cotton sowing area grows despite of delays.

Despite sowing of cotton stretching beyond the ideal sowing time in Punjab, it is close to reaching the target for 2021-22. The state agriculture department had the target of sowing cotton on 3.25 lakh hectares the crop had been sown over 3.01 lakh hectares.

New figures show global cotton stock levels are set to increase to 22m tonnes by the end of 2020/21 as the stocks-to-use ratio declines.

According to the latest update from the International Cotton Advisory Committee (ICAC), China’s stocks, however, are expected to decline as the rest of the world’s expands slightly.

Cotton consumption is expected to increase by 2% to 25.3m tonnes as the global economy continues to recover.

Decreases in Brazil, India and the US have caused a reduction in the 2020/21 global production estimate but cotton production — along with consumption and trade — are all expected to increase in 2021/22: Production is expected to increase by 5% to 25.5m tonnes, with increases in planted areas in the US and West Africa. In spot market, Cotton gained by 100 Rupees to end at 24540 Rupees.

Trading Ideas:
--Cotton trading range for the day is 23650-24850.
--Cotton dropped on profit booking after prices gained amid prospects of higher exports and falling supply in physical markets
--Cotton stock levels are set to increase to 22m tonnes by the end of 2020/21
--According to the latest update from the ICAC, China’s stocks, however, are expected to decline as the rest of the world’s expands slightly.
--In spot market, Cotton gained by 100 Rupees to end at 24540 Rupees.

Courtesy: Kedia Commodities

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