Monthly Rate Movement Report – May 2021
Posted : September 30, 2023
Dear All Cotton Friends,
In our mission to give Daily Spot Rate Team Gujcot is getting valuable support from Gujcot broker’s panel. We appreciated their humble service to the trade. Gujcot Team is giving daily closing of Indian and foreign futures rates.
In this report we have provided Following Rates during the month.
- MCX Cotton Daily Closing Rate
- USD-INR Exchange Rate Closing
- NCDEX and MCX converted into Rs. Candy Rate
We hope it will be useful to all the stake holders of Textile Value Chain.
- At the start of the month NY July future was 88 cents, it touched the high of 90.58 and close the month near 82 cents with monthly loss of near 596 points. NY December peaked up volume of trade and ended at 83.32 cents with monthly loss of 174 points.
- NY July-December inverse of near 400 points turned in to carry of 120 points. Lot of Trade roll over to December from July.
- Increasing certified stock, good weather in Texas, downtrend in supporting commodities lead NY future to down side.
- USDA in WASDE increased US export to 16.25 million bales with very good pace of shipment. USDA also increased some consumption, lowered some production which resulted in lower world’s ending stock.
- US Export Sales were good enough to meet the new export sales target. At end of the month US export sales crossed target and reach 16.3 million bales out of that 12.8 million bales already shipped. Still 10 weeks remaining of current crop season, require shipment is nearly 3,40,000 bales a week.
- Indian cotton market jumped from around 46,000 to 49,000 Rs per candy during this month supported by uptrend in yarn market and better export sales. Some speculative buying against limited arrival gave momentum to Indian cotton market.
- Mills were active buyer in CCI auction. CCI was able to sale huge quantity in later half of the month. After getting very good response, CCI gradually increased sales base price by nearly 1,500 Rs. per candy.
- Due to disruption in ginning operation due to second wave of Covid arrivals in open market was very limited and with the price support ginners held the cotton stock.
- Main seller was MNC and CCI both have increased daily sales price which created uptrend sentiment. Short covering of mills with speculators support Indian cotton market behaved opposite to international market.
- Basis player had double bonanza this month. Weaker NY futures and rising domestic prices gave best opportunity to earn. At one point of time Indian basis were -1,100 at the start of the month which ended +352 points at the end of the month. In other word Indian cotton appreciated nearly 1,450 basis points during just 25 days.
- Indian rupee got stronger from 74 Rs to 72.5 during this month.
- CCI has off loaded nearly 70% of procurements.
- Indian mills get good orders of yarn from abroad.
- Indian mills are well covered and yet do not want to reduce inventory level.
- In remaining four months of this season arrivals will be negligible compare to peak arrivals of the season.
- Next year’s MSP to be declare in coming month. It may be higher than current year.
- With stronger rupee, lower NY and higher Indian cotton prices Indian cotton export will face strong resistance.
- Indian cotton is now offered at higher rate than cotlook index in international market.
- This year import duty is applicable on import of cotton. Now imported cotton is at par with domestic cotton but mills who have export sales can only think for import. But with price level now it will not be easy for Indian mills to compete their rivals in international market.
- Good earning in spinning will continue to support domestic cotton prices.
- Cyclone Tauktae and Yass have given very good pre monsoon rain for sowing. IMD has predicted regular monsoon from 3rd June.
- Over all now Indian price will follow any uptrend in international market but will not follow in downtrend. If yarn market support mills than they will keep huge inventories and support the price.