MCX Cotton under long liquidation; Support seen at 21160
Commodity Online | April 20 2021
UPDATED 12:00:23 IST

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Technically Cotton market is under long liquidation as market has witnessed drop in open interest by 6.61% to settled at 5380 while prices down 120 rupees.

Now MCX Cotton is getting support at 21160 and below same could see a test of 20990 levels, and resistance is now likely to be seen at 21580, a move above could see prices testing 21830.

Cotton yesterday settled down by 0.56% at 21320 as CAI increases the production estimate to 360 lakh bales on higher output in North India. The second wave of Covid-19 is taking its toll on Gujarat’s textile industry which saw at least 25% decline in fabric production in the past 15-20 days.

Since the beginning of April, production of fabric has gone down in the state from around 5.50 crore metres to almost 4 crore metres per day. Demand from textile traders has gone down drastically.

If the situation doesn’t improve in next fortnight period, production of fabric would further plummet to as low as 50%. CAI estimated cotton exports to increase by 20% to 60 lakh bales in the 2020-21 season that begins in October, mainly due to higher international prices.

If the lockdown increases in Bangladesh, Indian cotton exports will be affected. CAI Crop Committee has estimated the total cotton supply till end of the cotton season 2020-21, that is up to September 30, at 496 lakh bales.

Around 35 to 37 lakhs out of the export of 60 to 70 lakh bales of cotton is being exported to Bangladesh. In spot market, Cotton dropped by 220 Rupees to end at 21880 Rupees.

Trading Ideas:
--Cotton trading range for the day is 20990-21830.
--Cotton prices dropped as CAI increases the production estimate to 360 lakh bales on higher output in North India
--The second wave of Covid-19 is taking its toll on Gujarat’s textile industry which saw at least 25% decline in fabric production in the past 15-20 days
--CAI estimated cotton exports to increase by 20% to 60 lakh bales in the 2020-21 season that begins in October
--In spot market, Cotton dropped by 220 Rupees to end at 21880 Rupees.

Courtesy: Kedia Commodities

Commodity Arrivals Rate
Mustard Oil 4.5 18600.00
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Tamarind 15 5000.00

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