Cotton Gained Tracking Overseas Prices As Drought Continued Threatening Crop Yield

US Cotton #2 Futures yesterday settled up by 0.16% at 25210 tracking firmness in overseas prices as the drought continued across the Canadian Prairies, threatening crop yields. The arrival of mustard in the mandis has decreased at all places in the country. U.S. rapeseed production is forecast to reach a record 1.8 million tons on record area and trend yield. Pressure also seen as Canada rapeseed production is projected at 20.5 million tons, up 1.5 million on the greater area. U.S. rapeseed production is forecast to reach a record 1.8 million tons on record area and trend yield. Pressure also seen as Canada rapeseed production is projected at 20.5 million tons, up 1.5 million on the greater area.  
 
COOIT was against any reduction in import duties on edible oils but wanted the Centre to remove the GST of 5 per cent on mustard seed and oil as it will help farmers and consumers. European Union rapeseed production is projected to show a modest gain in 2021/22 on increased planted area and improved yield but will remain below the levels observed from 2016 to 2018. In the spot market, Cotton gained by 10 Rupees to end at 25240 Rupees.  
 
Technically market is under short covering as the market has witnessed a drop in open interest by -4.01% to settled at 4812 while prices up 40 rupees, now Cotton is getting support at 24940 and below same could see a test of 24660 levels, and resistance is now likely to be seen at 25680, a move above could see prices testing 26140.

Trading Ideas:
# Cotton trading range for the day is 24660-26140.
# Cotton prices gained on slow sowing and higher demand from mills.
# The cotton crop in Punjab has been infected with a pest called pink bollworm for the second consecutive year.
# CAI demand for withdrawal of 10 percent customs duty on cotton imports.
# In the spot market, Cotton gained by 10 Rupees to end at 25240 Rupees.