Technically Cotton market is under short covering as market has witnessed drop in open interest by 0.99% to settled at 3994 while prices up 10 rupees.
Now MCX Cotton is getting support at 23870 and below same could see a test of 23770 level, And resistance is now likely to be seen at 24050, a move above could see prices testing 24130.
Cotton on MCX settled up by 0.04% at 23970 on anticipation of lower production due to reports of pink bollworm in major producing belts of Maharashtra. A few enquiries for exports, particularly from China, is supporting the market.
China is expected to purchase more cotton from India as country's buying is fuelled by 25% tax on fibre coming from United States, reports said. China may purchase 2.5-3.5 million bales in November, December and January.
Meanwhile, cotton demand for about 4 million bales is expected from Bangladesh and Vietnam. Cotton Association of India (CAI) has estimated domestic cotton consumption at 32.4 million bales, while exports are seen at 7 million bales. Cotton sowing in Gujarat, the largest grower of the fibre crop reached 2.65 million hectares as on August 6, which is about 10,000 hectares more than last year.
The Cotton Advisory Board (CAB) has said that India’s cotton exports are likely to increase by 20% during the current cotton season of October, 2017 to September, 2018, over last year.
It added that exports are expected to touch 70 lakh bales by September this year. From October, 2017 to April 2018, the total amount of cotton exported from India was 51.21 lakh bales. The board has estimated the cotton production for the current cotton season 2017-18 (October 2017 to September 2018) at 370 lakh bales.
--Cotton trading range for the day is 23770-24130.
--Cotton gained on anticipation of lower production due to reports of pink bollworm in major producing belts of Maharashtra.
--A few enquiries for exports, particularly from China, is supporting the market.
--Cotton Association of India (CAI) has estimated domestic cotton consumption at 32.4 million bales, while exports are seen at 7 million bales.
--Cotton prices in spot market gained by 50.00 rupees and settled at 23380.00 rupees.
Courtesy: Kedia Commodities