Cotton futures traded firm at Rs 21,120 per bale on January 4 after hitting a fresh high for the January series of Rs 21,150 during the day on the MCX. It jumped nearly 1 percent last week to settle at Rs 20,750 per bale on the MCX.
Cotton futures extended gains after a gap up open and trading near day’s high.
Mohit Vyas, an analyst at Kotak Securities said, “Cotton Corporation of India limiting purchases in many states and dull demand by domestic millers triggered some profit booking in Cotton during the fourth week of December.” “But CCI assuring of continued procurement, a steep rally of 2.6 percent in ICE Cotton futures and better export outlook supported cotton from the lower levels last week to placate farmers and political leader’s rage”, he said.
The forecasts of good export due to attractive Indian cotton prices and falling inventories in the world market and all-time high edible oil prices in the country are likely to provide strong support near current levels.
In the futures market, cotton for January delivery touched an intraday high of Rs 21,150 and an intraday low of Rs 20,760 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 21,150.
Cotton futures for January delivery gained Rs 380, or 1.83 percent, to Rs 21,130 per bale at 15:09 hours IST on a business turnover of 4,495 lots. The same for February contract soared Rs 380, or 1.81 percent at Rs 21,390 per bale with a business volume of 145 lots.
The value of January and February’s contracts traded so far is Rs 49.56 crore and Rs 8.53 crore, respectively.
Weakness in the dollar index and optimism on the stimulus package are likely to keep cotton steady with positive bias for the near term, said Kotak Securities.
At 09:43 (GMT), US Cotton futures were up 1.66 percent quoting at 79.42 cents/pound on Intercontinental Exchange (ICE).
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