Cotton futures (May) is on the verge of break the weekly support near 21495 & if it does, then we might see the counter plunging towards 21200 levels.
ICE cotton futures is trading near two months low taking knee-jerk reaction from the
alarming situation that the world's two largest economies may not reach a trade deal. There are talks that between U.S & China
could still go several ways that China could make some concessions to prolong talks even after tariffs and retaliation. The two
sides could end negotiations, given they are so far apart. Or China could reverse the changes and return the negotiations to where
they were a week ago and work toward a deal to be signed at the G20 summit in Japan in June. Back at home, there is another
concern hovering is that India's cotton imports are likely to rise by 80% this crop year (October 2018 to September 2019), due to
short supply of quality material for textile mills. After a long time gap, buoyancy has come back to chana futures, thanks to the
strong buying by the government agencies and tight supply. Day’s ahead, the June contract is expected to rally further towards
4600, taking support near 4440 levels. Guar seed futures (June) is expected to hover sideways in the range of 4400-4475, while
guar gum futures (June) may consolidate in the range of 8875-9025 levels. The declining guar seed-guar gum ratio, currently at
0.99 is giving an indication we might see selling in these counters due to sluggish demand from the millers. The volatile oil prices in
the international market due to trade tensions between U.S & China may also reduce the demand for guar gum.
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