Cotton Under Long Liquidation

Published 10-04-2017, 03:23 pm

Technically MCX Cotton is under long liquidation as market has witnessed drop in open interest by -1.63% to settled at 7262 while prices down -250 rupees.

Now Cotton is getting support at 20553.4 and below same could see a test of 20456.7 level, And resistance is now likely to be seen at 20823.4, a move above could see prices testing 20996.7.

Cotton on MCX settled down -1.2% at 20650 on higher imports amid availability of poor quality of the fibre in domestic markets which has hurt demand from local buyers.

India's cotton productivity has dropped in recent years owing to worm infestations hurting quality of the crop.

India's cotton output is expected to slip to 34.2-34.6 million bales in 2016-17 according to estimates of Southern Indian mills Association from 39.8 million bales in 2013-14. Poor quality of the fibre and lower output pushed up domestic cotton prices in 2016-17.

Moreover, this month's 2016-17 US cotton forecasts showed higher production and exports relative to last month. US output forecast was raised by 271,000 bales to 17.2 million. The total crop forecast in the central zone during the season 2016-17, is 19.8 million bales, up from 18.475 million bales last year.

Cotton prices were also down on rising demand concerns by the domestic millers over quality and rates. Higher cotton prices prompted domestic millers to import good quality of cotton from USA and African country at cheaper rate.

A huge volume of cotton stocks in China is set to be sold via auctions from March 6th to the end of August 2017. The Chinese government is expected to offer about 30,000 tonnes of cotton.

Trading Ideas:

--Cotton trading range for the day is 20457-20997.

--Cotton dropped on higher imports amid availability of poor quality of the fibre in domestic markets which has hurt demand.

--India's cotton productivity has dropped in recent years owing to worm infestations hurting quality of the crop.

--India's cotton output is expected to slip to 34.2-34.6 million bales in 2016-17 according to estimates of Southern Indian mills Association.

--Cotton prices in spot market dropped by 180.00 rupees and settled at 20890.00 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.