Cotton futures edged higher at Rs 18,850 per bale on October 12 as participants widened their positions as seen from open interest. Cotton had gained 2.02 percent last week on the MCX to settle at Rs 18,600/bale.
“Shorts continued to cover in near month while longs were seen accumulating in next month futures as market expects Cotton Corporation of India (CCI) to increase the pace of procurement in coming weeks,” said Mohit Vyas, analyst at Kotak Securities.
Vyas expects some consolidation in cotton in next couple of sessions before WASDE report tonight, but CCI procuring cotton at MSP and expectation of good export demand will keep cotton steady with positive bias.
Indian cotton prices were getting support from gains in ICE cotton futures, recovery in crude oil, improved demand from ginners and millers, and US Department of Agriculture's move to reduce world cotton closing stock forecast for 2020-21.
In the futures market, cotton for October delivery touched an intraday high of Rs 18,850 and an intraday low of Rs 18,660 per bale on the MCX. So far in the current series, the commodity has touched a low of Rs 16,060 and a high of Rs 18,850.
Cotton futures for October delivery gained Rs 240, or 1.29 percent, to Rs 18,850 per bale at 14:37 hours IST on a business turnover of 617 lots. The same for November contract soared Rs 240, or 1.28 percent, at Rs 19,000 per bale with a business volume of 481 lots.
The value of October and November’s contracts traded so far is Rs 8.04 crore and Rs 7.11 crore, respectively.
Kotak Securities expects Cotton to continue with marginal gains for the near future.
Source:-moneycontrol.com