Cotton futures was trading firm at Rs 21,600 per bale on February 18 as participants widened their positions as seen from open interest. Prices had fallen 0.1 percent the previous day to settle at Rs 21,450/bale on the MCX.
The agricultural commodity extended gain after a gap up open in the afternoon session, tracking positive global cues.
“Though all factors hint at more upside in world cotton prices, we expect cotton to retreat from higher levels after a prolonged rally," Mohit Vyas, Analyst at Kotak Securities, said. An 85 percent rally in the last 10 consecutive months may trigger some profit-booking, he said.
Arrivals in spot markets declined to 113,500 bales the previous day from 117,500 bales on February 16, traders said.
USDA will release weekly export sales data later in the day that will decide the short-term trend in the natural fibre.
MCX February cotton was trading at a discount of 16 percent from Cotlook A price of 93.80 cents as on February 16.
In the futures market, cotton for February delivery touched an intraday high of Rs 21,650 and an intraday low of Rs 21,450 a bale on the MCX. So far in the current series, the commodity has touched a low of Rs 20,700 and a high of Rs 21,700.
Cotton futures for February delivery gained Rs 150, or 0.70 percent, to Rs 21,600 per bale at 1526 hours on a business turnover of 3,606 lots. For March contract, it rose Rs 140, or 0.64 percent, at Rs 21,910 a bale with a business volume of 5,992 lots.
The value of February and March’s contracts traded so far is Rs 56.13 crore and Rs 61.60 crore respectively.
Geojit Financial Services said though profit-booking was seen in the last session too, as long as the price trades above Rs 21,350, an upside move targeting Rs 21,600-21,650 was possible.
At 0957 GMT, US Cotton futures jumped 0.23 percent quoting at 90.14 cents/pound on Intercontinental Exchange (ICE).
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