MCX Cotton under short covering; Resistance seen at 21220
Commodity Online | January 20 2021
UPDATED 12:00:39 IST

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Technically Cotton market is under short covering as market has witnessed drop in open interest by 10.06% to settled at 2995 while prices up 100 rupees.

Now MCX Cotton is getting support at 21060 and below same could see a test of 20990 levels, and resistance is now likely to be seen at 21220, a move above could see prices testing 21310.

Cotton yesterday settled up by 0.48% at 21120 on short covering after pressure seen after Cotton Association of India increasing India cotton stock estimates. Cotton Association of India increased Indian cotton output estimates for 2020-21 season to 358.50 lakh bales (170 kg) against 356 lakh bales pegged previously.

Cotton farmers of Anantapur, who suffered due to vagaries of nature earlier, are now suffering due to lack of procurement centres in the district. The district has two cotton procurement centres in Gooty and Tadipatri, while Rythu Bharosa Kendras (RBKs) are limited to registering the names of the cotton growers.

The Cotton Corporation of India (CCI), which opened two procurement centres, is paying Rs 5,825 per quintal for high quality cotton and Rs 5,725 per quintal for medium quality and Rs 5,615 for the low grade cotton to the farmers.

But the farmers cannot go directly to the CCI procurement centres and sell their produce. They have to get their names registered with the RBKs and only after getting an alert on their mobile phones, they can go to the procurement centres.

The farmers have to wait for their serial number and the produce will be procured depending on availability of space in the warehouse of the CCI procurement centres. In spot market, Cotton gained by 60 Rupees to end at 20940 Rupees.

Trading Ideas:
--Cotton trading range for the day is 20990-21310.
--Cotton gained on short covering after pressure seen as Cotton Association of India increasing India cotton stock estimates.
--CAI increased Indian cotton output estimates for 2020-21 season to 358.50 lakh bales.
--Cotton farmers of Anantapur, are suffering due to lack of procurement centres in the district.
--In spot market, Cotton gained  by 60 Rupees to end at 20940 Rupees.

Courtesy: Kedia Commodities
Commodity Arrivals Rate
Mustard Oil 2 14200.00
Ghee 20 39700.00
Coconut Oil 1 22800.00
Arecanut 39 41950.00

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