Gujcot Third Quarterly Rate Movement Report – 2022-23
Posted : July 20, 2024

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.

 

  • Daily Physical Spot Rate

 

  • MCX Cotton Daily Closing Rate

 

  • USD-INR Exchange Rate Closing

 

  • Cotlook Index

 

  • ICE Future Closing

 

  • NCDEX Kapas Rate

 

  • MCX Future Closing

 

  • NCDEX and MCX converted into Rs. Candy Rate

 

We hope it will be useful to all the stake holders of Textile Value Chain.

 

  • During the third quarter of the cotton season (April to June) NY July future remained within a range of 77 to 87 cents, while December future remained within a narrow range of 77 to 84.
  • The NY Future market attempted to break out of these ranges multiple times but was unable to sustain those breakouts. This suggests that there may have been various attempts to push the market beyond these established price levels, but the momentum was not strong enough to sustain the price movement outside of the given ranges.
  • The WASDE report was considered positive, indicating positive prospects, which were expected to support the market.
  • There were macroeconomic factors that were depressing the market. One such factor is the Federal Reserve's decision to increase interest rates. When interest rates rise, it can have a cooling effect on economic activity and potentially slow down demand in various sectors, including commodities markets.
  • Additionally, slow demand in textile was another factor contributing to the market's depressed state. This could be influenced by various factors such as changes in consumer behavior, global economic conditions, or other market-specific dynamics that are affecting the demand.
  • In the upcoming season, US planted acres are estimated at 11.087 million acres which is 19% below this season’s area but higher crop yields, leading to an overall increase in crop production in the United States.
  • The current US export sales commitment stands at approximately 14 million bales. Out of this total, around 10.8 million bales have already been shipped.
  • The fact that 10.8 million bales have already been shipped indicates that a significant portion of the sales commitments has been fulfilled.
  • The physical cotton rates in India remained stable in the range of 61,000 to 63,000 Rs per candy during April. However, from the first week of May, there was a sharp decline in prices, reaching a new seasonal low of 56,200. In the first week of June, there was some recovery due to factors such as a cyclone and improved buying, as buyers saw the prices as being at a bottom level. The Minimum Support Price (MSP) for the new season also played a role in the price recovery.
  • However, despite these factors, the recovery in prices was not sustained due to weak demand. By the end of June, the Gujcot Shankar-6 rate reached a new bottom near 55,300 to 55,500 Rs per candy.
  • Sowing is currently in progress all over India. Gujarat and northern regions have experienced ample rainfall, which is favorable for agricultural activities. However, Maharashtra and South India have received comparatively lower rainfall, which has resulted in delayed sowing compared to the previous year.
  • At the end of Jun the total sowing area in India stands at around 40 lakh hectares. This figure is lower than the corresponding time last year, which had reached 47 lakh hectares.
  • The Indian Rupee (INR) had a major trading range of 81 to 83 during the specified quarter.
  • Currency exchange rates are influenced by various factors such as interest rates, inflation, economic indicators, geopolitical events, and market sentiment. Fluctuations within a trading range can be influenced by market forces and the balance of supply and demand for the currency.
  • The Indian basis was relatively high, ranging between 1,400 to 1,600 in April. From mid-May to June, the downward trend continued, and the basis remained attractive, dropping below 600. This lower basis level likely attracted market participants and basis players to engage in buying activities.
  • The Indian futures market on MCX (Multi Commodity Exchange) has been experiencing a continuous downtrend. This downtrend is accompanied by low trading volumes and limited open interest, indicating that market participants have shown little interest in MCX futures. This could be due to various reasons, including uncertainty in the market, lack of trading opportunities, or a shift in focus to other investment options.

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