Cotton on MCX settled down by -0.57% at 19060 due to easing domestic as well as export demand in the spot market. Besides, rising arrivals from major growing regions also influenced cotton prices. For the current season, cotton arrivals in the country are pegged at 45.43 lakh bales (lb) as on 27 November, 2016. As per data, during November about 34 lakh bales has arrived in the country. According to USDA, production in India is forecast at 26.5 million bales (5.77 mt), up marginally from 2015/16. A rebound in India's yield is expected to offset a 10-percent reduction in cotton area this season. On the production front, industry is estimating 355 lakh bales (170 kg each) for the season 2016-17 (Oct-Sep), as against the government's first estimate of 321.2 lakh bales. As per CAB, India's cotton output is seen at 351 lakh bales (1 bale = 170 kg), up 4% from 338 lakh bales a year ago due to good monsoon and minimum pest infestation. Cotton area is down by 11.6% at 105.6 lh against 116 lh last year. Cotton output in 2016-17 is likely to rise by 3.8 per cent in from a year ago due to a sharp increase in yield following a favourable monsoon. The Cotton Advisory Board (CAB) in its meeting estimated cotton output at 35.1 million bales of 170 kg each for the cotton year 2016-17. Technically market is under long liquidation as market has witnessed drop in open interest by -0.63% to settled at 4392 while prices down -110 rupee, now Cotton is getting support at 19006 and below same could see a test of 18953 level, And resistance is now likely to be seen at 19106, a move above could see prices testing 19153.

Trading Ideas:

Cotton trading range for the day is 18953-19153.

Cotton prices dropped due to easing domestic as well as export demand in the spot market.

For the current season, cotton arrivals in the country are pegged at 45.43 lakh bales (lb) as on 27 November, 2016.

According to USDA, production in India is forecast at 26.5 million bales (5.77 mt), up marginally from 2015/16.

Cotton prices in spot market dropped by 90.00 rupees and settled at 18860.00 rupees.