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Cotton prices are expected to trade sideways today: Angel Commodities


Date: 23-07-2019
Subject: Cotton prices are expected to trade sideways today: Angel Commodities
MCX Jul cotton close on positive note last week but we have seen some corrections from higher levels tracking improved sowing, imports and weak international prices. As per farm ministry report, acreage under cotton in the country was 96.35 lakh ha so far, up slightly from 92.70 lakh ha from a year ago. However, deficient rain in main cotton growing districts in Gujarat is keeping prices near 21,500 levels. According to IMD, monsoon rain this season is down by 61% in Suarashtra region which may severely affect cotton grown in the area. Area in Gujarat under cotton is higher by 64% as on 12-Jul-19 at 18.76 lakh ha compared to 11.44 lakh ha last year. USDA increase production forecast for cotton in India by 1.75% this month to 29 million bales while the stocks jump by 17.8% to 8.93 million bales. Preliminary data published by the Ministry of Commerce indicates that shipments in the month of April 2019 are 74% lower at 2.11 lakh bales (Vs 8.23) as compared to last year. Government increase MSP for cotton by 100-105 rupees per quintal.

Outlook

Cotton futures may trade sideways due to mixed fundamentals of extended dry spell in Gujarat and weak international prices. Going forward, the imports may pick up due to lower prices in the US. Improvement in monsoon rains in last week of July and during August will ensure good production this season in India.

Source: moneycontrol.com