Cotton futures are trading lower at Rs 19,730 per bale on December 7 as participants increased their short position as seen from open interest. Cotton futures in the domestic market declined 0.9 percent last week to settle at Rs 19,880 per bale on the MCX compared to a 2.5 percent drop in Intercontinental Exchange (ICE) Cotton futures.
The weak cues from ICE Cotton had put pressure on Indian cotton last week despite aggressive buying from Cotton Corporation of India (CCI) and a better outlook for Indian cotton exports.
Cotton Association of India (CAI) in its November report maintained its production estimate for the season 2020-21 beginning on October 1, 2020, at 356 lakh bales of 170 kg as compared to 360 lakh bales for cotton season 2019-20.
The association has also revised down the exports for the season at 54 lakh bales as against 60 lakh estimated in the previous month.
In the futures market, cotton for December delivery touched an intraday high of Rs 19,890 and an intraday low of Rs 19,630 per bale on the MCX. So far in the current series, the commodity has touched a low of Rs 16,350 and a high of Rs 20,670.
Cotton futures for December delivery slipped by Rs 150, or 0.75 percent, to Rs 19,730 per bale at 15:08 IST on a business turnover of 2,477 lots. The same for the January contract eased by Rs 180, or 0.89 percent at Rs 19,950 per bale with a business volume of 180 lots.
The value of December and January’s contracts traded so far is Rs 22.73 crore and Rs 2.60 crore respectively.
Mohit Vyas, Analyst at Kotak Securities, said, "We expect cotton to sustain above 70 cents level and soon rebound from lower levels in the coming session on account of demand revival globally this season. USDA’s WASDE report which is due for release this week will decide the course going forward. Till then we expect cotton to trade on a steady note."
At 09:41 (GMT), US cotton futures fell marginally by 0.08 percent quoting at 71.51 cents/pound on Intercontinental Exchange (ICE).
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