MCX Cotton under short covering;Resistance seen at 16610
Commodity Online | April 08 2020
UPDATED 11:50:57 IST

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Technically Cotton market is under short covering as market has witnessed drop in open interest by 0.9% to settled at 5861 while prices up 300 rupees.

Now MCX Cotton is getting support at 16360 and below same could see a test of 16230 levels, and resistance is now likely to be seen at 16610, a move above could see prices testing 16730.

Cotton yesterday settled up by 1.85% at 16490 tracking overseas prices on the back of firmer oil prices and a slight uptick in export data by the U.S. Department of Agriculture (USDA).

Weekly export sales report from the USDA showed net sales of upland cotton totaled 147,500 running bales for 2019/2020 in the week ended March 26, down 47% from the previous week, while exports of 400,800 RB were up 4% from the previous week.

The Centre will spend 1,061 crore to reimburse the Cotton Corporation of India (CCI) and its sub-agent in Maharashtra for procuring cotton at the minimum support price in that State since 2014. The agriculture department has started creating awareness among the farmers about pink bollworm attack on cotton crops.

According to a spokesman of agriculture department, pink bollworm goes in winter nap during November and December and its eggs remain present on cotton seeds, branches and dried leafs in farms and ginning factories.

The Cotton Corporation of India (CCI) has stated that cotton procurement at MSP will continue across markets. However, farmers are still holding onto their crops seeking better prices and also due to the directives issued by the district collectors to avoid crowds.

Meanwhile, the United States Department of Agriculture reported net sales of 214,600 running bales (RB) for 2019/2020, which included 39,600 RB sales to China.

Trading Ideas:
--Cotton trading range for the day is 16230-16730.
--Cotton gained tracking overseas prices on the back of firmer oil prices and a slight uptick in export data by the U.S. Department of Agriculture (USDA).
--The agriculture department has started creating awareness among the farmers about pink bollworm attack on cotton crops.
--Weekly export sales report from the USDA showed net sales of upland cotton totaled 147,500 running bales for 2019/2020
--Corona virus is affecting the global trade and world economies

Courtesy: Kedia Commodities