Cotton on MCX settled up by 1.65% at 21520 due to rising domestic as well as export demand in the spot market. Though, reports of higher global cotton production capped some gains in cotton prices. A huge volume of cotton stocks in China is set to be sold via auctions from March 6th to the end of August 2017. The Chinese government is expected to offer about 30,000 tonnes of cotton a day for sale over the next several months. ICAC predicts that around 2.6 million tonnes of China's cotton stocks will be sold by the government this year. China's total stocks, including those in the private sector, are estimated to down to around 9.3 million tonnes at the end of this financial year, representing about 53% of world cotton stocks. After a significant decline, world cotton production is expected to pick up as the International Cotton Advisory Committee (ICAC) forecasts that world cotton output will rise by 2% to 23.4 million tonnes in the upcoming financial year 2017/18, mainly due to an increase in cotton planted area around the world. When it comes to cotton prices, ICAC predicts that average cotton prices are likely to be around 77 cents a pound, due to the downward pressure ahead on cotton prices which should shrink the country's stocks to the lowest in six years. Technically market is under short covering as market has witnessed drop in open interest by -7.92% to settled at 8159 while prices up 350 rupees, now Cotton is getting support at 21360 and below same could see a test of 21200 level, And resistance is now likely to be seen at 21630, a move above could see prices testing
21740.

Trading Ideas:

Cotton trading range for the day is 21200-21740.

Cotton prices ended with gains due to rising domestic as well as export demand in the spot market.

China cotton stocks plummet as government sets to sell its reserves

World cotton production is expected to rise in 2017/18

Cotton prices in spot market gained by 190.00 rupees and settled at 20880.00 rupees.