Cotton futures trade higher at Rs 19,270 per bale on October 16 as participants widened their positions as seen from open interest. After rising for the sixth straight day, cotton took a breather and settled at Rs 19,090/bale down Rs 10 on the MCX on October 15.
Cotton volumes were drastically down in near and next month contract which made it difficult to surmise any trend in the underlying at present, said Mohit Vyas, Analyst at Kotak Securities.
Market expectation of increased buying by Cotton Corporation of India (CCI) in the coming weeks, improved demand from millers and ginners, firm cues from ICE and ZCE Cotton futures and USDA reducing world cotton ending stock forecast for 2020-21 will continue to support cotton rates in the coming session as well.
Cotton production in Gujarat is likely to fall 6 percent to 8.2 million bales in 2020-21 due to a sharp fall in acreage, as per the first advance estimate released by the state’s farm department.
In the futures market, cotton for October delivery touched an intraday high of Rs 19,340 and an intraday low of Rs 19,070 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 19,340.
Cotton futures for October delivery gained Rs 180, or 0.94 percent, to Rs 19,270 per bale at 16:31 hours IST on a business turnover of 519 lots. The same for November contract soared Rs 200, or 1.04 percent at Rs 19,450 per bale with a business volume of 591 lots.
The value of October and November contracts traded so far is Rs 7.11 crore and Rs 2.91 crore respectively.
Kotak Securities expects cotton to continue with marginal gains for the near future.
Geojit Financial Services said as long as prices sustain to trade above Rs 18,900, there would be pullbacks targeting Rs 19,200-19,300 levels on MCX October future.For all commodities-related news, click here