Reuters
Cotton futures were trading higher at Rs 21,400 per bale on April 5 as participants increased their long positions as seen from open interest. Prices had jumped Rs 1,150 or 5.68 percent last week to settle at Rs 21,260/bale on the MCX.
The agri commodity traded in the positive territory after a gap-up start in the afternoon session tracking firm global cues.
The soft commodity has been trading higher than 5, 100 and 200 days’ moving averages but lower than 50 and 20 days’ moving average on the daily chart. The Relative Strength Index (RSI) is at 49.85 which indicates sideways momentum in prices.
“Proliferating cases of COVID-19 in India as well as across the globe, limited demand by domestic millers and Cotton Corporation of India (CCI) halting its procurement operation and lower it selling price may continue to weigh on Cotton prices in coming weeks,” said Mohit Vyas, Analyst at Kotak Securities.
The recent fall in ICE and ZCE Cotton futures, huge carry over stock from last season may also add in negative sentiments in cotton, Vyas added.
MCX April Cotton trade at a discount of 11 percent from Cotlook A price of 87.40 cents as on Wednesday.
In the futures market, cotton for April delivery touched an intraday high of Rs 21,460 and an intraday low of Rs 21,290 per bale on the MCX. So far in the current series, the commodity has touched a low of Rs 20,340 and a high of Rs 22,760.
Cotton futures for March delivery jumped Rs 140, or 0.66 percent, to Rs 21,400 per bale at 16:28 hours IST on a business turnover of 7,732 lots. The same for May contract gained Rs 130, or 0.60 percent at Rs 21,670 per bale with a business volume of 557 lots.
The value of April and May’s contracts traded so far is Rs 31.25 crore and Rs 5.30 crore respectively.
Geojit Financial Services Limited said, “Downside corrective moves are more likely to continue towards Rs 21,000 levels.”
At 1100 (GMT), US Cotton futures climbed 1.76 percent quoting at 79.32 cents/pound on Intercontinental Exchange (ICE).
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