MUMBAI(Commoditiescontrol): The premium variety cotton prices at major markets in the country maintained an upward trend for the third consecutive week on good demand while other varieties showed mostly a sideways trend in limited volume trade.
.jpg)
The weekly average price of the benchmark premium variety (30mm) cotton in Maharashtra rose 1.3% to trade at Rs 41,450/candy while the Gujarat S6 (30mm) increased 0.7% to Rs 42,100/candy. The difference in prices of Gujarat and Maharashtra were mainly due to quality.
Since the beginning of this month, prices of premium variety cotton for Gujarat rose 1%, the Maharashtra cotton premium variety rose 2.7% and MNCs continued to remain the forerunners in purchasing premium variety cotton as prospects of rising exports kept them the forerunners in the demand race.
Spinners on the other hand purchased as per their near term requirements as domestic sales of cotton yarn were disappointing however export sales were in line with market expectations.
The export sector of the textile industry benefitted more this season on supportive USD/INR which depreciated to more than 1 year low breaching the key 66 level and last traded at 66.07.
.jpg)
Further, the Indian cotton prices were very lucrative when compared to other international competitors. As per trade sources, the maximum export offer, for Gujarat S6(29mm+) was at 85 cents/lb CIF. It was lower 7.3% compared to Cotlook Index A, which is a basket of cotton CIF offers of major exporting countries, at 93.70 cents/lb.
On the supply side, cotton arrivals averaged at 0.8 lakh bales during the week due to slowing down gradually at the fag end of the supply season. Total supply during the current week (April 16-20) lowered 20.2% to an estimated volume of 4.04 lakh bales compared to 5.065 lakh bales in the prior week(April 9-13) and higher 38.8% compared to corresponding week last season at 3.38 lakh bales.
Total new crop arrivals, since Oct 1, have reached 27.475 million bales (85.8% of total estimated production at 32 million bales), up 3.4% from 26.58 million bales arrived during the same period last year.
INDIAN FUTURES MARKET:
.jpg)
Technical Ideas(March): Resistance is at 21480-21790. On breakout and close above 21790 expect a rally to 23140. Support will be at 20877-20437.
Traders already long and holding the same can maintain the stop loss at 20140. Correction to 20877-20437 can be used for accumulation if attained first.
Higher range of 21317-21790 can be used to take profits and re-enter long if close is above 21790 on Friday.
Conclusion:
Cotton prices has been trading in a tight range of Rs 39,500-43,000/candy since the beginning of the year 2018, with volatility influenced by the trend on the global bourse.
The premium variety cotton will maintain an upward trajectory and could crawl to touch the resistance level of Rs 43,000/candy as the season ends, observing the present factors in the market.
From the domestic fundamental point of view, export prospects are positive and price supportive hence this could be the only driving factor for prices to maintain an upward trajectory as domestic spinners were unlikely to make sizeable procurement until the liquidity issues in the market is resolved from domestic fundamental point of view.
With US cotton market maintaining a sideways trend between 79-85 cents/lb, until some big upmove, the Indian cotton market would trade between Rs 39,500-43,000/candy with bias to mildly upward.
(By Commoditiescontrol Bureau; +91-22-40015534)
0 Comments 
Post Comment 
