Technically MCX Cotton is under long liquidation as market has witnessed drop in open interest by -2.1% to settled at 4186 while prices down -80 rupees.
Now Cotton is getting support at 21066 and below same could see a test of 21003 level, And resistance is now likely to be seen at 21226, a move above could see prices testing 21323.
Cotton on MCX settled down by -0.38% at 21130 amid higher supplies this season through imports and good stocks available with the farmers.
According to trade sources, India’s cotton imports have touched an all-time high of 30 lakh bales this season. USDA forecasts India cotton production for 2017/18 at 6.01 mt, up nearly 6% while area is forecast at 11.5 mhac, up 10% from last year.
The domestic cotton arrivals in April are higher by 49% on year at 2.64 lakh tonnes (lt) compared to 1.77 lt last year, as per data.
The USDA reported US cotton planting 33% complete, lagging the average of 37% and last year’s 38%. Weekly export data also supported cotton prices which showed net upland sales last week totaled 160,600 running bales, up 5% from the week before.
However, favorable planting conditions across major producing areas across the world may pressurize prices.
Sowing of cotton has begun on a strong note in the key growing regions of North India such as Punjab and Haryana, and Southern Karnataka, for the 2017-18 season.
Buoyed by the high prevailing prices, farmers are seen bringing in a larger area under the fibre crop and the seed industry expects acreages this year to increase by up to a fifth over the previous year.
Trading Ideas:
--Cotton trading range for the day is 21003-21323.
--Cotton prices dropped amid higher supplies this season through imports and good stocks available with the farmers.
--According to trade sources, India’s cotton imports have touched an all-time high of 30 lakh bales this season.
--Sowing of cotton has begun on a strong note in the key growing regions of North India for the 2017-18 season.
--Cotton prices in spot market gained by 10.00 rupees and settled at 20600.00 rupees