Cotton Dropped On Profit Booking After Prices Gained In Last Some Sessions

Cotton yesterday settled down by -0.37% at 32730 on profit booking after prices gained in the last some sessions as cotton production is expected to fall dramatically in Telangana as a result of the four months of constant rain and pest attacks. While cotton output is expected to be low, cotton quality is also likely to be affected by the same factors. Cotton farmers have demanded a minimum support price (MSP) of ₹12,000 a quintal during the current season, saying the cost of production has increased significantly, while yields have dropped. India is likely to produce 34.4 million bales of cotton in the 2022/23 season that started on Oct. 1, up 12% from a year ago after farmers expanded the crop area. India’s cotton output for the season ended September 30, 2022, fell to 307.5 lakh bales (against 360.13 lakh bales estimated at the beginning of October last year. This is the lowest since 2007-08 when the production was 307 lakh bales. WASDE report said world trade is projected to be nearly 1 million bales lower from September, with declines in imports by China, Pakistan, Mexico, Turkey, and Vietnam.

The agency lowered its U.S. exports forecast by 100,000 bales to 12.5 million bales while cutting export estimates for Australia, Brazil, India, Benin, Cote d’Ivoire, Greece, and Mexico. “In the 2022/23 world balance sheet this month, consumption is 3.0 million bales lower, and ending stocks are 3.1 million bales higher,” the USDA said. In the spot market, Cotton gained by 280 Rupees to end at 32460 Rupees.

Technically market is under fresh selling as the market has witnessed a gain in open interest by 1.93% to settle at 2163 while prices are down -120 rupees, now Cotton is getting support at 32280 and below same could see a test of 31840 levels, and resistance is now likely to be seen at 33080, a move above could see prices testing 33440.

Trading Ideas:
# Cotton trading range for the day is 31840-33440.
# Cotton dropped on profit booking after prices gained in the last some sessions as cotton production is expected to fall dramatically in Telangana
# The pink worm harmed the cotton flock and will have an impact on output.
# However, India is likely to produce 34.4 million bales of cotton in the 2022/23 season, up 12% from a year ago
# In the spot market, Cotton gained by 280 Rupees to end at 32460 Rupees.

Source: Investing.com

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