Cotton prices in spot market dropped by 260.00 rupees and settled at 19760.00 rupees.Cotton on MCX settled down by -1.05% at 19780 on subdued demand from bulk consumers and increasing arrivals in domestic market. The US Department of Agriculture (USDA) trimmed India's domestic cotton consumption to 23.25 million bales as compared to 23.75 million bales previous estimates. Waning of demonetization effect amid better price realization at physical market may lead to higher supply in coming days which may result as price correction at futures platform. 

  USDA hiked India's ending stockpile projection to 12.09 million bales as compared to 11.79 million bales previous forecast. According to the International Cotton Advisory Committee (ICAC), cotton prices in the global market are likely to decline in the second half of 2016 -17 amid increase in production and steady demand. The ICAC Secretariat has forecast the season-average for Cotlook A Index in 2016-17 (starting October-September) will range between 66 and 83 cents per lb, with a midpoint of 74 cents/lb, which would be 4 cents/lb higher than last season.

 Global cotton production is expected to increase by 8 % to 22.8 million tonnes and global consumption is likely to remain steady at 24.1 million tonnes thereby putting pressure on prices. Technically market is under long liquidation as market has witnessed drop in open interest by -5.13% to settled at 4306 while prices down -210 rupee, now Cotton is getting support at 19684 and below same could see a test of 19587 level, And resistance is now likely to be seen at 19954, a move above could see prices testing 20127.