Cotton on MCX settled down by -0.28% at 21460 due to weak international prices and weak domestic demand. CAI estimated output at 341 lakh bales and revised its consumption higher at 295 lakh bales compared to 290 last year. Meanwhile, CCI may have purchased close to 1 lakh bales from the physical market. 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. China’s ending stock is likely to further drop by 19% to 7.5 million tonnes by the end of 2017/18, representing for 45% of world stocks. Moreover, speculators raised their net long position in cotton by 1,760 contracts to 107,001 in the week to Feb. 28, U.S. Commodity Futures Trading Commission (CFTC) data showed. Technically market is under long liquidation as market has witnessed drop in open interest by -4.8% to settled at 7767 while prices down -60 rupees, now Cotton is getting support at 21384 and below same could see a test of 21307 level, And resistance is now likely to be seen at 21594, a move above could see prices testing 21727.

Trading Ideas:

Cotton trading range for the day is 21307-21727.

Cotton settled down due to weak international prices and weak domestic demand.

CAI estimated output at 341 lakh bales and revised its consumption higher at 295 lakh bales compared to 290 last year.

A huge volume of cotton stocks in China is set to be sold via auctions from March 6th to the end of August 2017.

Cotton prices in spot market gained by 180.00 rupees and settled at 21060.00 rupees.