Cotton on MCX settled down by -0.66% at 19430 due to expectation of supply pressure good demand from new season crops in coming weeks. As per latest estimate by government, cotton is planted in 105.6 lh in the country, down by 11.6% against 116 lh last year. In Gujarat, the top cotton producing state, the crop had been across 23.8 lh ,down 13.8% from a year ago. In Maharashtra, the largest area under cotton, the acreage was at 38.0 lh, slightly down from around 38.2 lh a year ago. As per, the Cotton Association of India (CAI), the apex trade body of the fibre crop, The trade body has retained the cotton crop estimates for the year 2016-17 season at 336 lakh bales (of 170 kg each). The projected balance sheet drawn by CAI estimated total cotton supply for the cotton season 2016-17 at 398 lakh bales, while the domestic consumption is estimated at 309 lakh bales thus leaving an available surplus of 89 lakh bales. As per officials of the Nagpur-based Central Institute for Cotton Research (CICR), the sudden spell of heavy rains in cotton-growing regions of Maharashtra, Gujarat, Telangana and Karnataka during the last 10 days may lift the yield by an additional 10 %. According to USDA, production in India is forecast at 26.5 million bales (5.77 million tonnes), up marginally from 2015/16. A rebound in India’s yield is expected to offset a 10-percent reduction in cotton area this season. Technically market is under long liquidation as market has witnessed drop in open interest by - 21.85% to settled at 1509 while prices down -130 rupee, now Cotton is getting support at 19310 and below same could see a test of 19190 level, And resistance is now likely to be seen at 19640, a move above could see prices testing 19850.

Trading Ideas:

Cotton trading range for the day is 19190-19850.

Cotton prices remained under pressure due to expectation of supply pressure good demand from new season crops in coming weeks.

As per latest estimate by government, cotton is planted in 105.6 lh in the country, down by 11.6% against 116 lh last year.

According to USDA, production in India is forecast at 26.5 million bales (5.77 million tonnes), up marginally from 2015/16.

Cotton prices in spot market dropped by 640.00 rupees and settled at 19410.00 rupees.