Technically Cotton market is under long liquidation as market has witnessed drop in open interest by 8.01% to settled at 2664 while prices down 50 rupees.
Now MCX Cotton is getting support at 15930 and below same could see a test of 15690 levels, and resistance is now likely to be seen at 16490, a move above could see prices testing 16810.
Cotton yesterday settled down by 0.31% at 16170 due to weak demand and increased sowing this season.
Industry and trade associations allege that “excessively high” estimates made by the United States Agriculture Department (USDA) have increased pressure on cotton prices.
"USDA, in its report, has shown carryover stock of 19 million US size bales as on July 31, 2020.
If we reduce two months’ consumption by Indian mills for August and September 2020 from the said USDA stock, the carryover stock of Indian cotton works out to about 200 lakh bales as on September 30, 2020, as against 50 lakh bales estimated by the Cotton Corporation of India (CCI)," the Cotton Association of India (CAI) said in a recent release.
“Cotton Advisory Board has also estimated carryover stock of Indian cotton as on September 30, 2020 at 48.41 lakh bales.”
Industry body Southern India Mills Association (SIMA) too has objected to the USDA’s higher estimates. However, it has said that the difference between the closing-stock estimate of Indian industry and that of the USDA is of about 90 lakh bales to 100 lakh bales, as on September 30.
--Cotton trading range for the day is 15690-16810.
--Cotton dropped a due to weak demand and increased sowing this season.
--Industry and trade associations allege that “excessively high” estimates made by the USDA have increased pressure on cotton prices.
--USDA, in its report, has shown carryover stock of 19 million US size bales as on July 31, 2020
--In spot market, Cotton remains unchanged at by 0 Rupees to end at 15920 Rupees.
Courtesy: Kedia Commodities