Cotton on MCX settled down by -0.53% at 20610

Cotton on MCX settled down by -0.53% at 20610 tracking weakness in spot demand and overseas prices hurt by a slightly bearish supply demand USDA report as production in China expected to jump 5.6% India cotton traders cancel export deals due to higher local prices and country could export only 5 million bales, each of 170kg, in the 2017/18 marketing year started on 1 October—nearly a quarter below an initial estimate Market arrivals of cotton in the first three months of the 2017-18 marketing season starting October are higher by around 43% over corresponding last year.

However, based on the healthy market arrival trend of cotton so far, the CAI has maintained the crop size for the 2017-18 season at 375 lakh bales (of 170 kg each) in its latest estimates. CCI has procured around 5 lakh bales this season of which 4 lakh bales have been procured at MSP and the remaining 1 lakh bales as part of its commercial operations.

The Cotton Corporation of India (CCI) purchased nearly 485,000 bales cotton at minimum support price (MSP) fixed by government as prices are ruling firm, said sources. In a bid to protect the interest of farmers government asked the state agency to purchase the natural fibre at state fixed MSP if prices fall below that level. 

"Initially prices were ruling below MSP and we made purchases of 375,000 bales cotton at MSP and the maximum quantity has been bought from the farmers of Telangana," said sources. Technically now Cotton is getting support at 20554 and below same could see a test of 20497 level, And resistance is now likely to be seen at 20684, a move above could see prices testing 20757.

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