Cotton on MCX settled up by 1.83% at 20570 tracking firmness in spot demand amid lower arrivals in local mandis. India' cotton arrivals up to Jan 19 stood at 12.80 million bales during the 2016-17 marketing season, this is 5% below the arrivals in the same period last year, the data published by Cotton Corporation of India (CCI) said. Meanwhile, Chinese markets are gearing up for the Lunar New Year which will be celebrated on Jan 28. This will result in the global activities slowing down as whole of South East Asia gets impacted by these festivities. India's cotton arrivals falls 5% to 12.83 million bales until Jan 19 on late commencement of supplies though output for the 2016-17 is expected to higher. Last year arrivals till date stood at 13.51 million bales, according to CCI (Cotton Corporation of India) data. Cotton inflow in north India (Comprising Punjab, Haryana and Rajasthan) grew to 2.67 million bales from 2.18 million bales a year ago. Maharashtra and Madhya Pradesh cotton arrivals recorded marginal rise but in Gujarat fell 13.7% to 27.75 million bales. Cotton arrivals in Telangana slipped 33% to 1.74 million bales until Jan 19. Apart from this, farmers are also holding the stocks expecting prices to rise in the coming months, source added. Cotton Advisory Board (CAB) projected India's 2016-77 cotton output at 35.1 million bales as against 33.8 million bales a year ago. Technically market is under short covering as market has witnessed drop in open interest by -20.31% to settled at 2453 while prices up 370 rupee, now Cotton is getting support at 20344 and below same could see a test of 20117 level, And resistance is now likely to be seen at 20694, a move above could see prices testing 20817.

Trading Ideas:

# Cotton trading range for the day is 20117-20817.

# Cotton prices ended with gains tracking firmness in spot demand amid lower arrivals in local mandis.

# India' cotton arrivals up to Jan 19 stood at 12.80 million bales during the 2016-17 marketing season.

# CAB projected India's 2016-77 cotton output at 35.1 million bales as against 33.8 million bales a year ago

# Cotton prices in spot market gained by 150.00 rupees and settled at 20410.00 rupees.