Cotton prices to trade sideways to lower: Angel Commodities

By admin       2017-06-30

Jun 29, 2017 - MCX Cotton is seen recovering this week despite good progress in cotton sowing in India and the US. The prices have been under pressure in last few weeks, mainly due to lower physical demand and good start to kharif sowing in the country. As per latest data from Agricultural Ministry, cotton is planted in  24.70 lakh hectares  (l ha) till last week , higher by  29.5 %  compared to last year acreage of  19.1 l ha for same period. Government has increased Minimum Support Prices (MSP) on cotton for next season by 3.8% to Rs. 4,320 per quintal for long staple cotton and R s. 4,020 for medium staple cotton, up from Rs. 3,860 earlier. ICE cotton futures unchanged on Wednesday in thin trade ahead of this week's U.S. export sales and planting data, with a large harvest expected. The speculators cut a bullish stance in cotton by 25,303 contracts to 45,183 in the week to June 20, CFTC data showed on Friday. The fifth straight weekly cut brought their net long position to the smallest in about a year. For the week ending June 25, USDA had rated 57 % of the U.S. crop in good or excellent condition, down 4 % points from the previous week. Cotton rated in poor, or worse condition was estimated at 10%.  Outlook: Cotton futures are expected trade sideways to lower on reports good sowing progress due to normal monsoon forecast. Moreover, higher prevailing price of cotton may encourage farmers to plant more cotton as prices of oilseeds and pulses are at multi year lows. Moreover, higher stock levels in the country due to higher imports and lower exports may pressurize prices further. 

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