Technically Cotton market is under short covering as market has witnessed drop in open interest by 0.7% to settled at 1996 while prices up 100 rupees.
Now MCX Cotton is getting support at 19780.00 and below same could see a test of 19620.00 level, and resistance is now likely to be seen at 19980.00, a move above could see prices testing 20100.00.
Cotton on MCX settled up 0.51% at 19860 on short covering after prices dropped due to expectation of higher crop and lower exports prospects next season. As per farm ministry report, acreage under cotton in the country up 6% at 123.5 lakh ha so far, up from 116.9 lakh ha from a year ago.
Area in Gujarat under cotton is lagging last year at 26.3 lakh ha compared to 26.9 lakh ha last year. USDA kept production forecast unchanged for India this month to 29 million bales while the consumption and Exports projections were down by 2% and 4.55% respectively for 2019/20 season.
Trade data by Ministry of Commerce indicates that provisional shipments in the month of June 2019 are 88% lower at 60,000 (Vs 5 lakh bales) as compared to last year. The USDA's weekly Export Sales report indicated 19/20 upland cotton sales at 146,048 RB for the week that ended on 8/22.
That was down 10.93% from last week and 3.05% lower than the same week last year. According to the Telangana government cotton sowing progress, the area remained 17.61 lakh ha which is 33,000 ha less than the normal area and near around similar to the previous year (17.65 lakh ha).
Whereas, the area under cotton in AP stood at 5.45 lakh ha higher than 4.73 lakh ha in the previous year and increased out of normal 5 lakh ha.
--Cotton trading range for the day is 19710-20010.
--Cotton gained on short covering after prices dropped due to expectation of higher crop and lower exports prospects next season.
--Acreage under cotton in the country up 6% at 123.5 lakh ha so far, up from 116.9 lakh ha from a year ago.
--Area in Gujarat under cotton is lagging last year at 26.3 lakh ha compared to 26.9 lakh ha last year.
--Cotton prices in spot market gained by 50.00 rupees and settled at 20080.00 rupees.
Courtesy: Kedia Commodities