Cotton futures (June) is likely to remain trapped in the range of 22000-22350 levels
The domestic cotton prices are taking negative cues from the international
market, where the sentiments are getting hammered by the ongoing trade war.
The CFTC Commitments report released on Friday indicated the large specs in
cotton futures and options increasing their net short position by 12,258 contracts.
That put them net short a record reported 37,086 contracts in the week ending May
21. USDA data shows cotton export shipments at 70% of USDA’s projected total,
with the average pace at 78%. Including the unshipped sales, total commitments
are 107% of that projection, with the average pace at 101%. Back at home,
although cotton prices have softened, there is no buying interest in the domestic
market. Guar seed futures (June) might trade stable taking support near 4320
levels. The market participants are estimating that in the upcoming season acreage
of guar may drop by 15-20% as farmers may shift to cotton and pulses as they are
getting much better prices for these two crops. On the contrary, guar gum futures
(June) may consolidate in the range of 8600-8710 levels with upside getting
capped. Falling crude oil prices in the international market due to surge in
inventories & North America’s oil rig companies using cheaper fracturing material
such as slick water instead of guar gum may dent its export demand from India.
Mentha oil futures (June) is expected to take support near 1260-1250 levels. This
commodity may witness fresh demand from stockiest against the arrivals that are
likely to gather pace later this month.
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