Technically Cotton market is under long liquidation as market has witnessed drop in open interest by 3.14% to settled at 12404 while prices down 290 rupees.
Now MCX Cotton is getting support at 21500 and below same could see a test of 21390 level, And resistance is now likely to be seen at 21790, a move above could see prices testing 21970.
Cotton on MCX settled down by 1.32% at 21600 due to drop in exports and rise in imports in the current season. Cotton sowing during the current year (October 2019-September 2020) grew about 8%, while Punjab witnessed record sowing, said a senior government official.
Cotton acreage reached to a record of 4 lakh hectares in Punjab as against 2.8 lakh hectares last year due to state government's efforts to motivate farmers to shift to natural fibre from paddy, said the official.
Cotton acreage in the other two states remained near previous levels. Farmers in Haryana planted cotton on 6.60 lakh hectares and Rajasthan around 5 lakh hectares. Cotton sowing in north India comprising Punjab, Haryana and Uttar Pradesh starts in mid-April and continues till May-end or early June.
This year planting began late due to delayed rabi harvesting but has been completed on time. Cotton supply is dwindling quickly as 2018-19 crop is likely to be much lower than the initial projection of around 350 lakh bales.
In 2018/19, cotton output is estimated at 300.9 l-bales (of 170 kg each), down about 7.4% compared to previous estimate of 324 l-bales as per latest govt Adv Est. CAI cuts 2018-19 production estimate further by 2 l-bales to 328 l-bales for the year 2018-19.
--Cotton trading range for the day is 21390-21970.
--Cotton ended with losses due to drop in exports and rise in imports in the current season.
--Cotton sowing during the current year (October 2019-September 2020) grew about 8%, while Punjab witnessed record sowing.
--Cotton acreage reached to a record of 4 lakh hectares in Punjab as against 2.8 lakh hectares last year
--Cotton prices in spot market dropped by 120 rupees and settled at 22020.00 rupees.
Courtesy: Kedia Commodities