Cotton futures were trading higher at Rs 20,710 per bale on March 26 after touching a series low of Rs 20,150 during intraday on the MCX. Prices had declined 2.36 percent on March 25 to settle at Rs 20,310/bale on the MCX.
The agri commodity traded in the positive territory after a gap-down start in the afternoon session, tracking firm global cues, weak dollar and rise in crude oil.
The soft commodity has been trading higher than 200-day moving averages but lower than 100, 50, 20 and 5 days’ moving average on the daily chart. The Relative Strength Index (RSI) is at 34.89 which indicates bearish momentum in prices.
“ICE Cotton futures witnessed a worst daily drop in a month yesterday, which intensified selling in domestic cotton during yesterday’s session. ICE Cotton futures have declined by nearly 20% in the last one month, which has dragged domestic cotton by around 10% during the period, said Mohit Vyas, analyst at Kotak Securities.
The falling global cotton stocks and attractive Indian cotton prices in the world market may support natural fibre after some more correction, Vyas added.
MCX April Cotton trades at a discount of 15 percent from Cotlook A price of 89.50 cents as on Wednesday.
In the futures market, cotton for March delivery touched an intraday high of Rs 20,770 and an intraday low of Rs 20,150 per bale on the MCX. So far in the current series, the commodity has touched a low of Rs 20,150 and a high of Rs 22,540.
Cotton futures for March delivery jumped by Rs 330, or 1.62 percent, to Rs 20,710 per bale at 15:48 hours IST on a business turnover of 1,230 lots. The same for April contract gained Rs 240, or 1.16 percent at Rs 20,900 per bale with a business volume of 8,068 lots.
The value of March and April’s contracts traded so far is Rs 3.03 crore and Rs 63 crore, respectively.
At 10:20 (GMT), US Cotton futures climbed 0.92 percent to quote at 79.16 cents/pound on Intercontinental Exchange (ICE).
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