ADMISI Commodity Research
January 21, 2015
Tushar Rathod: [email protected]
Cotton Recap
MCX Cotton
Previous
JAN5
FEB5
MAR5
APR5
14620
14840
15060
15330
Open
High
Low
Close
14670
14890
15080
15320
14840
15060
15280
15480
14590
14810
15030
15250
14620
14840
15070
15280
Spread
Jan-2015
Feb-2015
NCDEX
Kapas
APR5
Previous
751
Open
749
High
764
Jan-2015
Low
749
Close
757.5
Net
Chg.
0
0
10
-50
Feb-2015
-220
Net
Chg.
6.5
%
Chg.
0.00
0.00
0.07
-0.33
Volume
1300
1505
984
379
% Vol.
Chg.
-32.08
-37.71
-5.66
22.26
OI
4349
3566
3386
1475
OI
Chg.
-403
-35
90
170
Mar-2015
-450
-230
%
Chg.
0.87
Volume
6871
% Vol.
Chg.
56.98
OI
15192
OI
Chg.
-1931
Indian Cotton
•
•
•
•
•
•
•
•
•
Indian Cotton futures closed flat yesterday. Rupee ended flat.
Ideas of large crop, weak export demand amid reports of Cotton sale by CCI added to downward
pressure on Cotton prices recently.
According to reports, Cotton Corporation of India (CCI) has procured 4.82 million bales of
Cotton so far this year at the minimum support price (MSP) from key growing states like Andhra
Pradesh and Maharashtra and may start selling it to traders.
Raw cotton is trading at near MSP levels at most locations across India. For 2014-15, MSP for
Cotton is Rs. 3750/ 100 Kg (medium staple) and Rs. 4050/ 100 Kg (long staple).
According to USDA, Indian Cotton output in 2014/15 will be 6.64 million MT in 12.70 million
hectares. Indian Cotton exports are likely to fall to 1.02 million MT in 2014/15 vs. 2.01 million
MT during previous year.
According to Cotton Advisory Board, India’s Cotton output in 2014-15 will be 40.0 million bales
vs. 39.8 million bales in previous year. Cotton exports are likely to be lower at 9 million bales in
2014-15 season, compared to previous season’s exports of 11.8 million bales.
Industry estimates for Cotton exports in 2014-15 are near 6.5 million bales, much below CAB
estimates.
According to Cotton Association of India (CAI), India produced 40.72 million bales of Cotton
crop in 2013-14 and is likely to produce 40.20 million bales of Cotton output in 2014-15.
According to 1st Advance estimates released by GoI, India’s 2014-15 Cotton output is expected to
be at 34.62 million bales vs. 36.59 million bales in the previous year.
1
ADMISI Commodity Research
January 21, 2015
International Cotton
ICE Cotton
MAR5
MAY5
JUL5
DEC5
•
•
•
•
•
•
•
•
Tushar Rathod: [email protected]
Previous
59.23
60.02
60.91
63.04
Open
59.2
60.1
60.89
63.05
High
Low
59.39
60.1
60.95
63.2
57.77
58.6
59.55
61.97
Close
57.79
58.66
59.61
62
Net
Chg.
-1.44
-1.36
-1.3
-1.04
%
Chg.
-2.43
-2.27
-2.13
-1.65
ICE Cotton prices closed sharply lower, below key support levels. Failure to attract buying after
trading in a range for last many weeks, likely attracted selling pressure amid large global Cotton
inventories.
China's Cotton output reached 6.16 million MT in 2014, down 2.2% from the previous year.
China imported 264,500 MT of Cotton in December, down 57% from the corresponding month a
year ago. China imported 2.4 million MT for the full year 2014, down 41%, after the government
issued fewer import quotas to mills.
According to ICAC, global inventories will swell to 21.25 million MT by the end of the 2014/15
crop year, lower than its previous estimate of 21.41 million MT.
In 2015/16, ICAC expects world inventory to fall to 21.13 million MT. Production will fall by 1.5
million MT, or 6%, to 24.55 million MT from 26.08 million MT estimated for 2014/15 and
consumption will rise by 28,000 MT to 24.67 million MT.
ICE Cotton stocks rose to 43,731 bales.
According to CFTC data, for the week ending 13 January, non-commercial traders increased
their net short positions in ICE Cotton.
Date
20-Jan-15
19-Jan-15
21-Jan-15
20-Jan-15
20-Jan-15
20-Jan-15
20-Jan-15
20-Jan-15
20-Jan-15
21-Jan-15
Physical Market Rates
Commodity
Cotlook Index
US Cotton New York Average
Brazil Cotton Cash
China (ZCE) 1 month forward
India Mumbai Cotton 29 mm
India Mumbai Cotton 34 mm
India Mumbai Cotton 22 mm
India Rajkot Shankar - 6 Kapas (Avg.)
India Akola Cotton Seed Oilcake
China Guangzhou Cotton Oilseed Meal
Rate
67.15
58.13
63.92
12940.00
30800.00
43900.00
27700.00
770.00
1421.00
2580.00
Units
USc/lb.
USc/lb.
USc/lb.
CNY/MT
INR/356 Kg
INR/356 Kg
INR/356 Kg
INR/20 Kg
INR/50 Kg
CNY/MT
2
ADMISI Commodity Research
January 21, 2015
Tushar Rathod: [email protected]
Charts & Outlook
MCX Cotton February (14720)
Trade Recommendation: - Buy on dips to 14820 -14750, S/L 14640, TGT 15150 - 15440. This call is on.
Exit this position.
Outlook: - Rupee is trading stronger. Cotton prices are in extreme oversold territory. Weakness in
overseas prices may add to negative sentiment on Indian Cotton prices despite Raw Cotton prices trading
near MSP. Downside towards 14500 may be seen.
ICE Cotton March (57.80)
Trade Recommendation: - None.
ICE Outlook: - Prices had been trading in a range 58.50 – 64.00 for the last many weeks. Breach of key
support at 58.50 levels and break of the range on the downside may take prices towards 55.00 levels in
the near term. Resistance is at 58.50 levels.
3
ADMISI Commodity Research
January 21, 2015
Tushar Rathod: [email protected]
DISCLAIMER:
This document is not for public distribution and has been furnished to you solely for your information and must not be reproduced or
redistributed to any other person. Persons into whose possession this document may come are required to observe these restrictions.
This material is for the personal information of the authorized recipient, and we are not soliciting any action based upon it. This report
is not to be construed as an offer to sell or the solicitation of an offer to buy any commodity or commodity derivative in any
jurisdiction where such an offer or solicitation would be illegal. It is for the general information of clients of ADMISI Commodities
Private Limited. It does not constitute a personal recommendation or take into account the particular investment objectives, financial
situations, or needs of individual clients. We have reviewed the report, and in so far as it includes current or historical information, it
is believed to be reliable though its accuracy or completeness cannot be guaranteed. Neither Archer Daniels Midland Company
(ADM), nor ADMISI Commodities Private Limited, nor any person/entity connected with it, accepts any liability arising from the
use of this document. The recipients of this material should rely on their own investigations and take their own professional advice.
Price and value of the investments referred to in this material may go up or down. Past performance is not a guide for future
performance. Certain transactions -including those involving futures, options and other derivatives as well as non-investment grade
securities - involve substantial risk and are not suitable for all investors. Reports based on technical analysis centers on studying charts
of a stock's price movement and trading volume, as opposed to focusing on a commodity’s fundamentals and as such, may not match
with a report on a commodity's fundamentals. Opinions expressed are our current opinions as of the date appearing on this material
only. While we endeavor to update on a reasonable basis the information discussed in this material, there may be regulatory,
compliance, or other reasons that prevent us from doing so. Prospective investors and others are cautioned that any forward-looking
statements are not predictions and may be subject to change without notice. Our investment businesses may make investment
decisions that are inconsistent with the recommendations expressed herein. No part of this material may be duplicated in any form
and/or redistributed without ADMISI Commodities Private Limited prior written consent.
4