June Cotton Edged Lower On Tuesday

MCX June Cotton edged lower on Tuesday tracking weakness in International cotton prices. However, the prices have been trading at 22 months highs in the domestic market as Miller and traders are stocking up cotton for the lean season. Moreover, good export demand from China is also fueling the prices. China buys 500,000 bales of new cotton crop from India to be shipped to China in Nov-Dec. Till last week, India kharif cotton acreage is 18% lower at 9.96 lakh ha vs 12.18 lakh ha yr ago. India's cotton exports are seen rising around 21% on year to 75 lakh bales (1 bale = 170 kg), backed by depreciation in the rupee and higher international prices of the commodity. Farmers in top cotton growing states of Gujarat and Maharashtra are yet to begin sowing, while in Punjab, Haryana, Karnataka, and Rajasthan, acreage was lower on year, a ccording to the data.

ICE Cotton fell more than 2% on Tuesday weighed down improvement in weather conditions in Texas, the major producing region of the natural fiber in the United States. USDA in its weekly crop progress report released on Monday showed the 2018 U.S. cotton crop was 76% planted for the week ended June 3, matching the five-year average for the week. The ICAC on Friday lowered its global cotton inventory forecasts for the 2018-19 crop year. On Tuesday, China sold 22,600 MT of cotton from state reserves, which was 75% of the total offered.

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