MCX Cotton under long liquidation; Support seen at 21740
Commodity Online | May 10 2021
UPDATED 12:00:54 IST

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Technically Cotton market is under long liquidation as market has witnessed drop in open interest by 9.38% to settled at 7253 while prices down 30 rupees.

Now MCX Cotton is getting support at 21740 and below same could see a test of 21670 levels, and resistance is now likely to be seen at 21950, a move above could see prices testing 22090.

Cotton yesterday settled down by 0.14% at 21820 tracking weakness in overseas prices amid chances of some rain in parts of Texas, but persistent concerns over supply kept prices on track for a weekly gain.

The U.S. Department of Agriculture's weekly export sales report showed net sales of 63,700 running bales for 2020/2021, down 17% from the previous week and 56% from the prior 4-week average.

Post forecasts India's MY 2021/22 cotton production will increase by four percent to 29.5 million 480 lb. bales on a reduced area of 12.9 million hectares. Yields are expected to improve by five percent based on the expectation of a normal monsoon forecast by the Indian Meteorological Department.

In April, cotton fiber and yarn prices decreased due to a surge in COVID-19 cases, which has led to a slowdown in the production and consumption of textile products.

Domestic retail demand remains severely hampered by the pandemic; however, exports of cotton and cotton products are rising, providing the best chance of recovery in the sector.

The Committee on Cotton Production and Consumption expects production during the current season (October 2020 to September 2021) to be at 360 lakh bales, slightly lower than the 2019-2020 estimate of 365 lakh bales. In spot market, Cotton gained by 60 Rupees to end at 22150 Rupees.

Trading Ideas:
--Cotton trading range for the day is 21670-22090.
--Cotton pared gains tracking weakness in overseas prices amid chances of some rain in parts of Texas
--USDA’s weekly export sales report showed net sales of 63,700 running bales for 2020/2021, down 17% from the previous week
--India's MY 2021/22 cotton production will increase by four percent to 29.5 million 480 lb. bales on a reduced area of 12.9 million hectares.
--In spot market, Cotton gained by 60 Rupees to end at 22150 Rupees.

Courtesy: Kedia Commodities

Commodity Arrivals Rate
Ghee 7 43000.00
Coriander Seeds 4.4 5590.00
Yam 1.5 2500.00
Green Chilli Seeds 70 3150.00

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