All India daily arrivals are steady, in the range of 2,25,000 to 2,40,000 bales per day. In daily arrivals, quality of cotton is comparatively weaker than during the period between December 2019 & January 2020 first half.
January was really active and volatile month for cotton, Good Chinese demand was witnessed in small span of time, Indian S-6 prices reported with its sharp move from approximately Rs 39600 to Rs 41200 per candy ex. ginning factory within week and is currently trading around Rs 39700-39,800 per candy Ex. Gin (for 29mm/3.8 Mic & 75 RD value), ICE March movement was witnessed from USC 71+ level to USC 68 level and is currently trading around USC 70, with the trend continuing.
Mills have covered their cotton positions due to better yarn parity. Also CCI is touching its MSP procurement for 2019-20 season with around 50,00,000 bales till the end of January 2020.
Coronavirus plays spoilsport
With all this one major thing reported was Coronvirus in China, which became a big reason for slowdown in trading activities with China for the world, even as Chinese New Year holidays were already on. The intensity of virus can determine the demand of worldwide cotton in China for February 2020. Sentiments in India also got weaker with this news and prices are trading on weaker note comparatively.
With good quantity of cotton bought by CCI and still good pace of daily arrivals in India, there is optimism about Indian cotton crop size being in the range of 365-380 lakh bales. Lower grade cotton (further cotton) started to arrive in the market & is trading in the range of Rs 33000- 38000 per candy, depending on quality.
ICE March dropped to 5-week low, but then settled a little higher. Volatile ICE contract is not giving clear indication that the market “should be” lower or higher or level out. But for sure, ICE March 68 cents is having good support for the time being.
The market awaits the latest export sales report from the USDA. US cumulative export sales commitment reached 1,25,75,355 bales till 16th January. Despite excellent US export sales and shipments, on Friday, January 24, markets closed downward for fear of slowdown due to Coronavirus.