Cotton futures traded firm at Rs 18,140 per bale on September 30 as participants widened their positions as seen from open interest.
Mohit Vyas, Analyst at Kotak Securities said: “Weakness in ICE Cotton futures in the last couple of sessions, increasing new crop arrivals and weak demand prospects even during festival season due to unfettered outspread of COVID-19 in the home country is keeping cotton prices under check at present.”
Textile Ministry’s Committee on cotton production and consumption has pegged Indian output at 357 bales for 2019-20 season and ending stock of cotton at 105.5 lakh bales.
According to Agmarknet data, Cotton arrival across the country during September 1-25 have more than doubled from the previous month at 49,530 tons, but it is still down 31 percent from last year.
In the futures market, cotton for October delivery touched an intraday high of Rs 18,180 and an intraday low of Rs 18,080 per bale on the MCX. So far in the current series, the commodity has touched a low of Rs 16,060 and a high of Rs 18,260.
Cotton futures for October delivery gained Rs 40, or 0.22 percent, to Rs 18,140 per bale at 15:20 hours IST on a business turnover of 773 lots.
The value of October contract traded so far is Rs 2.35 crore.
Kotak Securities expect Cotton to consolidate near current range this week but upcoming supply pressure from the US will keep long term outlook marginally weak.