Cotton settled flat amid weakness in spot demand on rising domestic fibre arrivals. Around 80,000 bales of cotton have been arriving across India which is expected to cross 100,000 bales in coming days. Arrivals are expected to reach their peak from early November, following the conclusion of Diwali celebrations. Also, the Cotton Association of India (CAI) hiked forecast of cotton crop for the 2016-17 by 2% to 34.5 million bales as compared to previous year. India's cotton production estimates for 2016-17 stood at 34.5 million bales as compared to 33.7 million bales last year. CAI had previously estimated cotton production for 2016-17 at 33.6 million bales. The projected Balance Sheet drawn by the CAI estimated total cotton supply for the cotton season 2016-17 at 40.70 million bales as compared to 42.7 million bales last year. CAI estimated the domestic consumption at 31 million bales as compared to 38.2 million bales previous year. Thus, leaving an available surplus of 9.7 million bales. In global markets, the natural fibre market also took stock of weekly export sales data from the US Department of Agriculture, which showed net upland sales totalled 160,400 running bales (RB) of cotton for the week ended Oct 27, up 24% from the previous week. However, exports were down 25% from the prior 4-week average. Technically market is under short covering as market has witnessed drop in open interest by -5.12% to settled at 2875, now Cotton is getting support at 18336 and below same could see a test of 18243 level, And resistance is now likely to be seen at 18536, a move above could see prices testing 18643.

Trading Ideas:

Cotton trading range for the day is 18243-18643.

Cotton settled flat amid weakness in spot demand on rising domestic fibre arrivals.

Around 80,000 bales of cotton have been arriving across India which is expected to cross 100,000 bales in coming days.

The CAI hiked forecast of cotton crop for the 2016-17 by 2% to 34.5 million bales as compared to previous year.

Cotton prices in spot market dropped by 40.00 rupees and settled at 18330.00 rupees.