Cotton futures traded steady at Rs 21,180 per bale on January 7 as participants increased their long positions as seen from open interest. Cotton futures pared gains in the last session on January 6, tracking weakness in ICE Cotton to settle at Rs 21,150/bale level.
Mohit Vyas, Analyst at Kotak Securities, said, “Domestic cotton which registered Rs 400 gain in the first session of the week, has remained steady in last two sessions as limited buying by domestic millers and Cotton Corporation of India (CCI) limiting purchases in some states weighed on natural fibre. However, CCI has assured continued procurement, and a steep rally in ICE Cotton futures and better export outlook are likely to keep cotton buoyed in coming sessions.”
The CCI has so far procured approximately 70 lakh bales of cotton across the country, which is multi-fold higher than the same period last year.
Indian Cotton trades at 10 percent discount from Cotlook A prices of 85.60 cents as on January 5.
In the futures market, cotton for January delivery touched an intraday high of Rs 21,260 and an intraday low of Rs 21,080 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 gained Rs 30, or 0.14 percent, to Rs 21,180 per bale at 15:23 hours IST on a business turnover of 4,731 lots. The same for February contract jumped Rs 10, or 0.05 percent at Rs 21,420 per bale with a business volume of 457 lots.
The value of January and February’s contracts traded so far is Rs 26.13 crore and Rs 6.70 crore respectively.
Weakness in the dollar index and optimism about the stimulus package are likely to keep cotton steady with positive bias for the near future. WASDE report, releasing next week will decide the short term course in natural fibre, said Kotak Securities.
At 09:55 (GMT), US Cotton futures were up by 0.15 percent quoting at 79.95 cents/pound on Intercontinental Exchange.
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