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Cotton futures gain 0.69% to Rs 21,830 per bale on lower inventory

The soft commodity has been trading higher than 5, 20, 50, 100 and 200 days’ moving averages on the daily chart. The Relative Strength Index (RSI) is at 57.32 which indicates upbeat momentum in prices.

Mumbai / April 15, 2021 / 06:56 PM IST

Cotton futures were trading higher at Rs 21,830 per bale on April 15 as participants reduced their positions as seen from open interest. Prices had risen Rs 250 or 0.84 percent yesterday to settle at Rs 21,610/bale on the MCX.

The agri commodity extended gain to trade at day’s high after a gap-up start in the evening session.

The soft commodity has been trading higher than 5, 20, 50, 100 and 200 days’ moving averages on the daily chart. The Relative Strength Index (RSI) is at 57.32 which indicates upbeat momentum in prices.

“Domestic cotton continued with upward march following sharp recovery in ICE Cotton futures after bullish WASDE report. Besides, adverse climate condition forecast in US largest cotton-producing state, Texas, weakening domestic currency and falling supply in the physical market have helped domestic cotton to bounce back from recent low”, said Mohit Vyas, Analyst at Kotak Securities.

According to Agmarknet data, cotton arrivals across the country in the first 10 days of this month have plunged below 23,400 tons, down by 73 percent from last month, reminding horrible period of complete lockdown during last year.

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MCX April Cotton trade at a discount of 11 percent from Cotlook A price of 87.40 cents as on Tuesday.

In the futures market, cotton for April delivery touched an intraday high of Rs 21,930 and an intraday low of Rs 21,600 per bale on the MCX. So far in the current series, the commodity has touched a low of Rs 20,340 and a high of Rs 22,760.

Cotton futures for March delivery rose Rs 150, or 0.69 percent, to Rs 21,830 per bale at 18:16 hours IST on a business turnover of 6,146 lots. The same for May contract gained Rs 170, or 0.77 percent at Rs 22,160 per bale with a business volume of 3,020 lots.

The value of April and May’s contracts traded so far is Rs 71.60 crore and Rs 49.96 crore respectively.

Kotak Securities expects Cotton to trade in a broad range of 81-86 cents for the next few sessions.

At 1319 (GMT), US Cotton futures were down 0.33 percent quoting at 83.92 cents/pound on Intercontinental Exchange (ICE).

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Sandeep Sinha

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