Cotton futures were firm at Rs 20,790 per bale on December 31 as participants widened their positions as seen from open interest. Cotton futures in the domestic market rose 0.4 percent yesterday to settle at Rs 20,650 per bale on the MCX.
Mohit Vyas, Analyst at Kotak Securities said, “Profit booking ahead of an extended weekend increased arrivals in the physical market and Cotton Corporation of India putting purchase limit kept cotton under check since last week.”
“Long-term bullish outlook remains intact as all-time high edible oil prices in the country, prospects of good export due to attractive Indian cotton prices and falling inventories in the world market are likely to support cotton going forward”, Vyas noted.
In the futures market, cotton for January delivery touched an intraday high of Rs 20,790 and an intraday low of Rs 20,680 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 20,950.
Cotton futures for January delivery gained Rs 130, or 0.63 percent, to Rs 20,780 per bale at 16:06 hours IST on a business turnover of 4,137 lots. The same for February contract jumped Rs 100, or 0.48 percent at Rs 21,010 per bale with a business volume of 22 lots.
The value of January and February’s contracts traded so far is Rs 28.73 crore and Rs 0.83 crore respectively.
Weakness in the dollar index and Donald Trump signing on coronavirus relief fund of up to $900 billion are likely to keep short term outlook bullish for cotton, said Kotak Securities.
At 10:40 (GMT), US Cotton futures were up 0.35 percent quoting at 78.24 cents/pound on Intercontinental Exchange (ICE).
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