According to Angel Commodities, expect cotton futures to trade lower on reports of higher stock levels in the country coupled with slow down in mill uptake at current higher levels.
Angel Commodities’ report on Cotton
Cotton futures on MCX fell on Thursday its 4th fall in five sessions on reports of higher supplies this season through imports due to strong rupees. Moreover, as per Care ratings, cotton production in India may higher by 4% in 2016/17 compared to last year. The domestic cotton arrivals in the first 25 days in April are higher by 59% on year at 2.32 lakh tonnes (lt) compared to 1.46 lt last year, as per Agmarknet data. As per CAI, the arrivals during March 2017 are higher than that of the corresponding month during last year.
We expect cotton futures to trade lower on reports of higher stock levels in the country coupled with slow down in mill uptake at current higher levels. Moreover, lower exports prospects and higher imports keeping prices under pressure. Poor to average response to state auction in China may support world cotton prices but rapid sowing progress in the US will further pressurize world cotton prices.