Commodity Online |
August 14 2020
Technically Cotton market is under long liquidation as market has witnessed drop in open interest by 2.57% to settled at 2011 while prices remain unchanged 0 rupees. Now MCX Cotton is getting support at 16320 and below same could see a test of 16280 levels, and resistance is now likely to be seen at 16390, a move above could see prices testing 16420.
Cotton yesterday settled remain unchangeby 0% at 16370 tracking weakness in ICE cotton prices after the release of a federal report projecting higher production and inventories of both the U.S. and global crop, as consumption is forecast to sink further.
In its monthly World Agriculture Supply and Demand Estimates (WASDE) report, the U.S. Department of Agriculture (USDA) raised its U.S. production estimate for the 2020/21 crop by 3% to 18.1 million bales.
The U.S. ending stocks forecast has been raised 11% from the prior month. USDA also increased its 2020/21 global ending stocks estimates, which are projected 2.1 million bales higher than the previous month and 4.4 million bales more than in 2019/20.
World production is seen 1.3 million bales higher and consumption is forecast 1.2 million bales lower at 113.05 million bales, USDA said. China's agriculture ministry lowered cotton imports in the 2019/20 year due to weak demand for Beijing's textile exports.
Worldwide restrictions to contain the coronavirus pandemic hit non-essential apparel demand and has weighed on cotton prices. Markets now await weekend talks between the United States and China in which the two nations are expected to review their Phase 1 trade deal.
Trading Ideas:
--Cotton trading range for the day is 16280-16420.
--Cotton settled flat tracking weakness in ICE prices after report projecting higher production and inventories
--USDA raised its U.S. production estimate for the 2020/21 crop by 3% to 18.1 million bales.
--The U.S. ending stocks forecast has been raised 11% from the prior month.
--In spot market, Cotton remains unchanged at by 0 Rupees to end at 16130 Rupees.
Courtesy: Kedia Commodities (Source: commodityonline.com)