Cotton on MCX settled down -0.24% at 21040 on higher supply in the domestic market. India's 2016-17 cotton imports are set to jump more than a third from a year ago to a record 3 million bales as the rupee's rise makes buying overseas cheaper, senior industry officials and executives said. The strong rupee - now at its highest level in 18 months - has also braked cotton exports from the world's biggest producer of the fibre, a trend that has helped rival suppliers in Brazil, the United States and some African countries boost their own exports. That total of 3 million bales would be 36 percent more than the 2.2 million bales imported in the 2015-16 crop year, with stocks coming mainly from African countries, the United States, Brazil and Australia. Tightness in domestic supply is also boosting imports, as Indian farmers hold off on deliveries in the hope of achieving higher prices later in the crop year. The state-run Cotton Advisory Board has forecast production of 35.1 million bales in the current crop year, but industry officials say production is likely to be around 34 million bales as output was hit in southern states of Andhra Pradesh and Tamil Nadu by a drought. Technically market is under long liquidation as market has witnessed drop in open interest by -0.29% to settled at 7777 while prices down -50 rupees, now Cotton is getting support at 20933.4 and below same could see a test of 20826.7 level, And resistance is now likely to be seen at 21163.4, a move above could see prices testing 21286.7.

Trading Ideas:

# Cotton trading range for the day is 20827-21287.

# Cotton prices dropped on higher supply in the domestic market.

# India's 2016-17 cotton imports are set to jump more than a third from a year ago to a record 3 million bales.

# CAB has forecast production of 35.1 mlb bls in the current crop year, but industry officials say production is likely to be around 34 mlb bls.

# Cotton prices in spot market dropped by 50.00 rupees and settled at 20880.00 rupees.