Technically Cotton market is under short covering as market has witnessed drop in open interest by 28.07% to settled at 269 while prices up 190 rupees.
Now MCX Cotton is getting support at 19590 and below same could see a test of 19390 levels, and resistance is now likely to be seen at 19920, a move above could see prices testing 20050.
Cotton yesterday settled up by 0.97% at 19800 as the relentless monsoon rains, which have ravaged large parts of Vidarbha and Marathwada region of Maharashtra, has now started affecting the cotton crop.
Local farmers and leaders of Shetkari Sangthana want early procurement of cotton by Cotton Corporation of India (CCI) and Maharashtra State Co-operative Cotton Growers’ Marketing Federation Ltd (Mahacot) as exposure to excess of rains and lack of labour force for plucking cotton is affecting the crop.
They have also demanded that procurement norm of moisture content in cotton should be increased so that farmers could sell more cotton to the CCI and Mahacot. They are also facing massive labour problems in plucking cotton crop.
Out of the total cotton production of Maharashtra, almost 15 per cent is from that district. Last year almost 55 lakh quintal (100kg) cotton was procured under MSP prices from the district. However, the moisture content is capped at 12 per cent by CCI and Mahacot.
This cap should be increased to 18 per cent given the present circumstances. Framers are willing for lesser remuneration but at MSP rates. In the open market the farmers will get much less money for their cotton.
--Cotton trading range for the day is 19390-20050.
--Cotton prices gained as relentless monsoon rains hit cotton crop in Maharashtra
--Farmers want early procurement of cotton as exposure to excess of rains and lack of labour force for plucking cotton is affecting the crop.
--However, the moisture content is capped at 12 per cent by CCI and Mahacot.
--In spot market, Cotton gained by 30 Rupees to end at 19530 Rupees.
Courtesy: Kedia Commodities