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Cotton futures dip 0.47% to Rs 20,960 per bale on low demand

In the futures market, cotton for January delivery touched an intraday high of Rs 21,130 and an intraday low of Rs 20,920 per bale on the MCX.

Mumbai / January 11, 2021 / 05:07 PM IST
Cotton

Cotton

Cotton futures fell marginally to Rs 20,960 per bale on January 11 as participants trimmed their positions as seen from open interest. Cotton prices had gained 1.40 percent last week on the MCX.

Cotton futures pared gains after a positive open in the afternoon session, tracking weakness in ICE Cotton futures and ahead of USDA’s WASDE report.

Mohit Vyas, Analyst at Kotak Securities, said, “Bearish factors like limited buying by domestic millers and Cotton Association of India increasing India cotton stock estimates also weighed on futures.”

Cotton Association of India increased Indian cotton output estimates for 2020-21 season to 358.50 lakh bales (170 kg) against 356 lakh bales pegged previously.

Indian cotton trades at 11 percent discount from Cotlook A prices of 86.55 cents as on January 7.

Close

In the futures market, cotton for January delivery touched an intraday high of Rs 21,130 and an intraday low of Rs 20,920 per bale on the MCX. So far in the current series, the commodity has touched a low of Rs 19,340 and a high of Rs 21,340.

Cotton futures for January delivery dropped Rs 100, or 0.47 percent, to Rs 20,960 per bale at 16:24 hours IST on a business turnover of 4,276 lots. The same for the February contract eased Rs 90, or 0.42 percent at Rs 21,230 per bale with a business volume of 1,084 lots.

The value of January and February’s contracts traded so far is Rs 57.85 crore and Rs 34.22 crore respectively.

Though a better export outlook is likely to support cotton from lower levels going forward, we expect cotton to trade range-bound with negative bias till WASDE report amid increased cotton production and stock estimates for India, said Kotak Securities.

At 10:59 (GMT), US cotton futures were down 0.66 percent quoting at 79.24 cents/pound on Intercontinental Exchange.

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Disclaimer: The views and investment tips expressed by experts on Moneycontrol.com are their own and not those of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.
Sandeep Sinha
first published: Jan 11, 2021 05:07 pm

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