Technically Cotton market is under long liquidation as market has witnessed drop in open interest by 3.36% to settled at 4545 while prices down 70 rupees.
Now MCX Cotton is getting support at 19600 and below same could see a test of 19510 levels, and resistance is now likely to be seen at 19790, a move above could see prices testing 19890.
Cotton on MCX settled down by 0.35% at 19680 as demand is not improving in physical market amidst ample supplies. Robust sowing, supported by increased water availability following extended rains, has brightened the castor crop prospects in the largest growing States, Gujarat and Rajasthan.
According to farmers and trade sources, the current crop condition appears good and the output is likely to cross 18 lakh tonnes, a likely record in at least the past seven years. In 2011-12, castor crop output was recorded at 16.2 lakh tonnes.
Castor crop looks good at present and we believe that the crop size will be much higher than last year's. Farmers are estimating the crop to be between 17-19 lakh tonnes. Thanks to increased acreage and likely favourable climate, the crop will give a record output this year.
Gujarat is the largest producer of the oilseed, which is used by multiple industries. At 7,40,484 hectares, the State saw a nearly 39 per cent jump in castor sowing for kharif 2019, as against 5,33,789 hectares in the previous year.
Rajasthan has also witnessed about 20 per cent rise in castor sowing at 1,54,200 hectares, as against 1,28,300 hectares in the previous year. The Solvent Extractors' Association of India (SEA) estimated castor output for the year 2018-19 at about 9.35 lakh tonnes.
--Cotton trading range for the day is 19510-19890.
--Cotton prices dropped as cotton exports fall to nearly half on higher domestic prices during October-December 2019.
--India's cotton exports for the first three months of the season have tumbled to nearly half or by down about 45 per cent to 10 lakh bales
--The CAI data revealed that cotton shipments arrived at Indian ports till December 31, 2019 stood at 6.5 lakh bales, which was 3.53 lakh bales for the same period
--Cotton prices in spot market dropped by 220.00 rupees and settled at 19350.00 rupees.
Courtesy: Kedia Commodities