Expect Cotton complex to trade on mixed note: Angel

Angel Commodities' report on Kapas

ICE Cotton December futures recovered from lower levels on short coverings coupled with renewed dry weather concerns in Texas and settled 0.5% higher on Tuesday. Prices have declined sharply over the last few weeks on lack of buying, demand concerns from China, favorable climatic conditions and forecast of higher inventories next season. The USDA report pegged US output at a four year high at 17.5 mn bales. USDA’s WASDE report in August pegged inventories at 6 year highs at 5.6 million bales.

According to the USDA weekly crop progress report, Cotton planting is complete. Good to excellent condition stood at 50% from 52% last week. The USDA report pegged plantings at 11.37 million hectares, 9% higher from last year.

ICAC has cut forecast a cut in the global output as well as consumption. However, the decline in the consumption is higher than the output, which may result in higher stocks.

OutlookCotton complex are expected to trade on a mixed note. lower level demand may lend support to the prices. However, no sharp upside is seen on increased planting, favorable climatic conditions, global demand concerns and comfortable supplies.

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