Cotton Edged Higher On Tuesday

MCX June Cotton edged higher on Tuesday on reports of lower closing stocks for 2017/18. The Cotton Association of India today cut its estimate for 2017-18 (Oct-Sep) closing stock to 16 lakh bales from 21 lakh bales seen in April. Currently, cotton is trading at 22 months highs in the domestic market as Miller and traders are stocking up cotton for the lean season. Moreover, In its balance sheet for the 2017-18 cotton season, CAI has estimated total cotton supply the till September 30 at 410 lakh bales. This includes the opening stock of 30 lakh bales in October 2017. Domestic consumption has been higher, at 324 lakh bales, while exports, at 70 lakh bales, are higher than earlier estimates of 50- 55 lakh bales.

ICE Cotton settled over 1% higher on Tuesday, helped by concerns of dry weather in West Texas, a major producing region, and a supportive supply demand report by the USDA. Last week it traded over six-year high earlier in the session on expectations of an increase in buying from major importer China. USDA US and World supply and demand report showed old crop US ending stocks for cotton cut by 500,000 bales to 4.2 million bales. That came from an increase to exports, as the new crop carryout was down the same to 4.7 million bales. The Cotlook A index was up 150 points from the previous day to 99 cents/lb on June 7. The cotton AWP was updated to 81.27 cents/lb on Thursday, 1.39 cents/lb above the day prior.

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