Cotton seed markets were quite strong during the week ending July 16th. Cotton cake however traded in a confined range. Cotton market was supported from limiting inventory in domestic markets and data reflecting improving global export demand and lower ending stock estimates globally. Talks of acreage lagging behind last year and possible crop damage from heavy rains in Maharashtra region also supported the markets. Till July 16 2021, the area planted with cotton was at 9.84 million hectares versus 11.3 million hectares the previous year. Cotton planting in India has been lagging as central and northern parts of the country received scant rainfall. Spot cotton seed in Rajkot and Kadi were being offered near Rs1500/20 kgs and Rs.1465-1470/20 kgs respectively. Over previous week the spot offers had appreciated by Rs.20-30/20 kgs. However the trend of cotton cake was mixed. In Akola spot market, prices of cotton cake strengthened by Rs. 25 Rupees/qtl week on week. But in Kadi, cotton cake prices were down Rs.15-20/qtl. Last traded spot price was near Rs. 2925/qt in Akola while cotton cake on the weekend was seen averaging around Rs 2875-2880/qtl. Kapas as April’22 contract at NCDEX closed much above the 1370 level, gaining about 100 points over last week. The August contract of Cotton cake at NCDEX was seen trading between 2830 and 2960 this week, just 5 points above previous week. As the exchange warehouse stocks are quite huge against the July expiry, there are fears of temporary supply pressure in spot markets when these deliveries are offered for sale in the open market, after the July series expiry at NCDEX. This resulted in light trading activity and the August contract continued facing resistance in holding above 2950. Demand for feed usually remains sluggish during the rainy season and this also contributed in preventing cotton cake to appreciate unlike cotton seed. As per the latest USDA report the global cotton production in 2021/22 is projected at 119.4 million bales, 6 percent (6.8 million bales) above the previous year but only slightly higher than the 4-year average. Likewise world cotton mill use is projected at 123.2 million bales in 2021/22, nearly 4.6 million bales (4 percent) above 2020/21 and the third highest on record. However, despite rising mill use, 2021/22 global cotton trade is expected to decrease 4 percent from 2020/21’s record. With world cotton mill use estimated above production, 2021/22 global ending stocks are forecast to decline for a second consecutive season. As a result, the world stocks-to-use ratio is projected at its lowest in 3 years and is expected to keep cotton prices above recent levels. Therefore the broader fundamentals are in favor of further price appreciation from current offers. Lower planted area and reports of possible crop damage Maharashtra (because of heavy rains in districts of Jalna, Parbhani and Jalna), shall be the other key factors in preventing any major drop in cotton cake prices.