Cotton Market Under Short Covering

Published 23-01-2017, 12:43 pm
CT
-

Technically MCX Cotton market is under short covering as market has witnessed drop in open interest by -15.79% to settled at 3078 while prices up 40 rupee.

Now Cotton is getting support at 20103.4 and below same could see a test of 20006.7 level, And resistance is now likely to be seen at 20263.4, a move above could see prices testing 20326.7.

Cotton prices gained on strong demand from bulk consumers. Demand of the fibre has improved steeply in last few weeks as exporters are actively buying cotton to meet their export commitments which was made earlier during starting of the marketing year in October.

Similarly, below average supply of cotton in current season also keeping demand higher at physical market. Brazilian cotton prices are likely to be firm in 2017 amid lower output of harvested cotton from the 2015-16 crop and lower ending stocks of the same crop.

According to CONAB, 2017 began with cotton inventories at only 162,900 tons, the lowest level since 2010-11 and although an increase in the 2016-17 crop is expected, availability of cotton in the market is estimated at 1.6 million tons, a volume last observed in the 2009-10 season.

Cotton consumption is estimated at 750,000 tons in the 2016-17 season, up 4.2 per cent compared to the previous season, while exports are projected to decline 5.6 per cent compared to 2015-16. In the 2016-17 cotton marketing year, US cotton exports are likely to increase by 35 per cent. US market share of world cotton trade is forecast to increase as exports have increased 66 per cent year on year in the first five months of the current marketing year.

The higher cotton export growth was mainly due to higher exports to China, Indonesia, Vietnam and other small countries.

Trading Ideas:

--Cotton trading range for the day is 20007-20327.

--Cotton prices gained on strong demand from bulk consumers.

--Similarly, below average supply of cotton in current season also keeping demand higher at physical market.

--Cotton consumption is estimated at 750,000 tons in the 2016-17 season, up 4.2 per cent compared to the previous season

--Cotton prices in spot market gained by 120.00 rupees and settled at 20260.00 rupees.

Latest comments

Loading next article…
Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2025 - Fusion Media Limited. All Rights Reserved.