MCX cotton climb to its highest levels since November (22,540) last week but corrected to close at 22,260 rupees per bale due to fear of losing demand at higher prices. Moreover, India is losing cotton export market to Brazil due to higher prices and stronger rupees. CAI trims cotton crop size to 321 lakh bales for 2018/19 season, lowest since 2009-10 which will raise imports and decline exports. USDA kept production and consumption figures unchanged at 27 and 24.8 million bales respectively but revised down imports and exports by 12.5% and 6.7% respectively. According to USDA attaché report, India 2019/20 cotton output to rise about 7% yr/yr to hit five-year high on higher yields, acreage.
Outlook
Cotton futures expected to trade sideways to lower tracking weak global prices due to bearish USDA monthly report. Moreover, improving in exports demand from China and increasing domestic demand may support prices. Reports of CCI selling its stock may keep prices in a range.
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Source: Moneycontrol
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