Cotton on MCX settled down by -0.73% at 19170 on subdued demand from bulk consumers and falling exports. Also, cotton prices have come down further as the arrivals improve to more than 125,000 bales. Need based buying by millers in view of tumbling export of yarn amid sluggish overseas demand of fiber may restrict the major gains in cotton. During October, China imported 128,349 tons of cotton yarn as compared to 162,341 tons a year earlier. Most imports in October this year came from Vietnam. Those from India, the leading source a year ago, fell by more than half. Interestingly exports to China are highest since Dec 2015 and at a 2016 high levels. Share of China in weekly cotton yarn exports is at around 54%.In a bid to seek help from the impact of demonetisation on the textile industry, the Southern India Mills' Association (SIMA) has asked the Centre to come up with remedial measures including enhancing the working capital limit by 50%. Chairman of the association said that the situation has improved by 50-60%, but it would take another six months for the industry to rise above the biggest ever cash crunch the economy has witnessed. The government has already announced two months moratorium for loans up to Rs 10 million, the textile industry needs at least one year moratorium period for repayment of the dues and interest. Technically market is under long liquidation as market has witnessed drop in open interest by -5.33% to settled at 4420 while prices down -140 rupee, now Cotton is getting support at 19084 and below same could see a test of 18997 level, And resistance is now likely to be seen at 19254, a move above could see prices testing 19337.

Trading Ideas:

Cotton trading range for the day is 18997-19337.

Cotton prices dropped on subdued demand from bulk consumers and falling exports.

Also, cotton prices have come down further as the arrivals improve to more than 125,000 bales.

During October, China imported 128,349 tons of cotton yarn as compared to 162,341 tons a year earlier.

Cotton prices in spot market gained by 120.00 rupees and settled at 18950.00 rupees.