Cotton on MCX settled up by 0.42% at 21550 due to improved supplies from major growing regions. Besides, exports to China may slow down due to reserve stocks auctions, also fuelled the downtrend. In addition to this, China sold 30,169 ton in the its auction, indicating strong demand. Arrivals in local mandis were estimated at 180,000 bales including 45,000 from Gujarat and 67,000 from Maharashtra. The Cotton Corporation of India (CCI) sold nearly 1,100 bales of cotton through e-auction on Monday, said source. The government agency offered 3,600 bales for sale. CCI sold cotton at Rs 44,500-44,600 per candy from its godowns in Maharashtra, Telangana and Karnataka. 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. Technically market is under short covering as market has witnessed drop in open interest by -1.58% to settled at 7644 while prices up 90 rupees, now Cotton is getting support at 21414 and below same could see a test of 21277 level, And resistance is now likely to be seen at 21634, a move above could see prices testing 21717.

Trading Ideas:

Cotton trading range for the day is 21277-21717.

Cotton prices ended with losses due to improved supplies from major growing regions.

China sold 30,169 ton in the its auction, indicating strong demand.

Arrivals in local mandis were estimated at 180,000 bales including 45,000 from Gujarat and 67,000 from Maharashtra.

Cotton prices in spot market dropped by 70.00 rupees and settled at 20990.00 rupees.