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Cotton yesterday settled up by 0.79% at 19170 rose ahead of the monthly supply and demand crop report, which investors expected to show declines in production and ending stock numbers, while a gain in the US stock markets provided further support. The report of reopening of Chinese market from Feb 13 is also being considered as positive by ginners who are expecting that the resumption of Chinese buying will push up prices not only on international market but also in local market.The sentiments are turning positive owing to bounce back in export figures & China’s optimistic moves to curb the negative impacts of coronavirus on financial markets. In the international market, the coronavirus outbreak “could be affecting economic growth, shipping of cotton, and shipping of all commodities as part of the Phase 1 deal would be a factor to watch out.CCI procured around 24% of the total cotton arrived in the market till 28th January 2020. CCI bought the major quantity of cotton (57% of total procurement) from Telangana (about 27 lakh bales out of total procurement of around 48 lakh bales) followed by Maharashtra (8 lakh bales), Gujarat (2.57 lakh bales) and Punjab, Haryana and Rajasthan combined (4.63 lakh bales). Technically market is under short covering as market has witnessed drop in open interest by -1.04% to settled at 6393 while prices up 140 rupees, now Cotton is getting support at 19040 and below same could see a test of 18930 levels, and resistance is now likely to be seen at 19220, a move above could see prices testing 19290
Trading Idea for the day
* Cotton trading range for the day is 18930-19290.
* Cotton rose ahead of the monthly supply and demand crop report, which investors expected to show declines
* The report of reopening of Chinese market from Feb 13 is also being considered as positive by ginners
* CCI procured around 24% of the total cotton arrived in the market till 28th January 2020.
Cocudakl yesterday settled up by 1.64% at 1801 recovered on fresh buying after prices crashed tracking weakness from other agri prices and amid hopes of elevated cotton output in the country. The CAI has retained its cotton crop estimate for the 2019-20 season beginning October 1 at 354.50 lakh bales of 170 kg each as in the previous estimate. The estimates are higher the first advance estimate production figures of the Ministry of Agriculture which is 322.7 lakh bales. Total Cotton output during 2018-19 was 287.1 lakh bales. The total cotton supply estimated by the CAI during the months of October 2019 to January 2020 is 234.89 lakh bales of 170 kgs each. This includes the arrivals of 192.89 lakh bales and imports of 10 lakh bales upto 31st January 2020 and the opening stock at the beginning of the season which has been revised by the CAI from 23.50 lakh bales to 32 lakh bales.These higher estimates pulled the NCDEX Cottonseed oilcake futures from Rs 2300 per quintal in last week of December 2019 to a contract low of Rs 1747 per quintal earlier this week. The commodity has edged up thereafter and currently quotes at Rs 1857 per quintal, up 1% on the day. Technically market is under fresh buying as market has witnessed gain in open interest by 0.2% to settled at 73560 while prices up 25 rupees, now Cocudakl is getting support at 1774 and below same could see a test of 1751 levels, and resistance is now likely to be seen at 1812, a move above could see prices testing 1827.
Trading Idea for the day
* Cocudakl trading range for the day is 1751-1827
* Cocudakl slipped amid hopes of elevated cotton output in the country.
* CAI has retained its cotton crop estimate for the 2019-20 season beginning October 1 at 354.50 lakh bales
* Total Cotton output during 2018-19 was 287.1 lakh bales.
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