Cotton futures gained for the fifth day and scaled a fresh lifetime high of Rs 23,940 a bale intraday on June 3 as participants raised fresh bets as seen from open interest. The agriculture commodity traded in the positive territory after a gap-up start, tracking firm global cues.
On the MCX, Cotton futures for June delivery rose Rs 130, or 0.55 percent, to Rs 23,860 a bale at 1501 hours on a business turnover of 7,284 lots. For the July contract, it jumped Rs 160, or 0.67 percent, at Rs 24,130 a bale with a business volume of 425 lots.
The value of June and July contracts traded so far is Rs 23.05 crore and Rs 1.62 crore, respectively.
Mohit Vyas, Analyst at Kotak Securities said, “Against a 7 percent drop in ICE (Intercontinental Exchange).Cotton Futures, domestic cotton prices have risen by 6 percent in May amid prospects of higher exports and falling supply in physical markets”
Demand from millers was reportedly increasing Rajasthan, Gujarat, Maharashtra and Madhya Pradesh against decimated arrivals, Vyas added.
MCX May Cotton traded at a discount of 3 percent from Cotlook A price of 89.70 cents as of June 2. The discount has shrunk from 12-14 percent it used to trade a few days ago as international prices softened.
The recovery in the CBOT complex along with crude oil and the recent rally in Indian cotton have also supported the natural fibre this week.
The soft commodity has been trading higher than 5, 20, 50, 100 and 200- days simple moving averages and exponential moving averages on the daily chart. The momentum indicator Relative Strength Index (RSI) is at 64.94 ,which indicates bullish movement in prices.
At 0943 GMT, US Cotton futures were up 0.60 percent quoting at 84.27 cents/pound on ICE.
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