Cotton futures traded firm at Rs 19,430 per bale on October 26 after declining nearly 3 percent on the MCX in the previous session.
Mohit Vyas, Analyst at Kotak Securities, said, “After giving positive returns in 16 out of last 17 weeks, some profit booking was inevitable in cotton.” Cotton had rallied over 25 percent in the last three months.
Indian cotton trades at 8-9 percent discount from Cotlook A prices of 77.75 cents as on October 23.
Procurement of cotton is likely to be delayed by 10-15 days in Maharashtra and Telangana because of rains, a senior official of Cotton Corporation of India.
Farmers have sown cotton across 13.04 million hectares in 2020-21 (July-June) season, up by 2.1 percent from a year ago, as of September 25, according to the farm ministry.
In the futures market, cotton for October delivery touched an intraday high of Rs 19,600 and a low of Rs 19,350 per bale on the MCX. So far in the current series, the commodity has touched a low of Rs 16,060 and a high of Rs 19,930.
Cotton futures for October delivery edged up Rs 180, or 0.94 percent, to Rs 19,430 per bale at 16:16 hours IST on a business turnover of 118 lots. The same for November contract rose Rs 250, or 1.28 percent, to Rs 19,730 per bale on a business volume of 976 lots.
The value of October and November’s contracts traded so far is Rs 3.79 crore and Rs 12.97 crore, respectively.
Departing monsoon is likely to keep new crop arrivals significantly higher in coming weeks, which may also keep cotton under check going forward, Kotak Securities said.
At 10:51 (GMT), US cotton futures were trading up 0.35 percent at 72.36/pound on Intercontinental Exchange (ICE).For all commodities related news, click here