Cotton futures steady at Rs 16,140 per bale on short covering

Cotton futures were steady at Rs 16,140 per bales on July 20 despite short-covering of positions by participants. Cotton futures on the Multi-Commodity Exchange (MCX) were down 0.2 percent last week compared to the 3 percent fall in ICE Cotton futures as cheaper Indian cotton prices compared to global peers restricted fall in the domestic grown natural fibre.

Cotton sowing across the country till July 17 crossed over 113 lakh hectares, up nearly 17 percent from the same period last year, according to the agriculture ministry.

In the futures market, cotton for July delivery touched an intraday high of Rs 16,150 and an intraday low of Rs 16,100 per bales on the MCX. So far in the current series, the commodity has touched a low of Rs 15,170 and a high of Rs 17,040.

Cotton futures for July delivery gained Rs 10, or 0.06 percent, to Rs 16,150 per bales at 15:47 hours IST on a business turnover of 3,016 lots. The same for August delivery rose Rs 20, or 0.12 percent, to Rs 16,360 per bales on a business volume of 1,281 lots.

The value of July and August's contracts traded so far is Rs 13.88 crore and Rs 9.10 crore, respectively.

Kotak Securities expects ICE Cotton to trade rangebound with negative bias in today’s (July 20) session and prospects of lower global cotton demand in coming months following an unfettered rise in the total number of cases of coronavirus across the world.

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