Cotton on MCX settled down by -0.09% at 21060 due to rising arrivals from major producing belts. According to USDA, cotton weekly export sales for the current marketing year for the period ending February 16th totaled 367,200 running bales. Sales increased by 65 percent compared to previous week and by 21 percent compared to four week average. The Cotton Association of India (CAI), the apex trade body for the sector, has maintained the crop estimate for 2016-17 season at 341 lakh bales of 170 kg each in its latest estimates for January, same as that in the previous month. However, it expects the consumption of the fibre to increase marginally in the year ahead on pick-up in demand. CAI expects cotton consumption to increase for the ongoing crop year to 295 lakh bales, against its previous estimate of 290 lakh bales. “As the yarn prices and fibre prices are looking up, we expect better consumption in the days ahead. We see a pick-up in demand from the textiles sector and have revised the figures upwards marginally,” said Nayan C Mirani, CAI President. The projected balance sheet drawn by the CAI estimated total supply for cotton season 2016-17 at 405 lakh bales. Considering the domestic consumption of 295 lakh bales as stated above, the total available surplus for the season works out to 110 lakh bales, CAI said in a statement. Technically market is under fresh selling as market has witnessed gain in open interest by 1.74% to settled at 9285 while prices down -20 rupees, now Cotton is getting support at 20986 and below same could see a test of 20913 level, And resistance is now likely to be seen at 21146, a move above could see prices testing 21233.

Trading Ideas:

# Cotton trading range for the day is 20913-21233.

# Cotton prices dropped due to rising arrivals from major producing belts.

# According to USDA, cotton weekly export sales for the current marketing year for the period ending February 16th totaled 367,200 running bales

# The CAI has maintained the crop estimate for 2016-17 season at 341 lakh bales of 170 kg each in its latest estimates for January

# Cotton prices in spot market dropped by 120.00 rupees and settled at 20700.00 rupees.