Cotton futures up 0.25% in afternoon trade

Cotton futures rose marginally to Rs 16,260 per bale on July 21 as participants trimmed their short positions. On the Multi-Commodity Exchange (MCX), the commodity had settled with a gain of 0.5 percent on July 20.

However, weighing on the price is increased rainfall in Maharashtra and limited demand by local millers. This has dragged down cotton prices in the physical market across the country

In the futures market, cotton for July delivery touched an intraday high of Rs 16,570 and a low of Rs 16,010 per bale on the MCX. So far in the current series, the commodity has touched a low of Rs 15,170 and a high of Rs 17,040.

Cotton futures for July delivery gained Rs 40, or 0.25 percent, to Rs 16,260 per bale at 15:51 hours IST on a business turnover of 2,790 lots. The same for August delivery rose Rs 20, or 0.12 percent, to Rs 16,450 per bale on a business volume of 1,454 lots.

The value of July and August's contracts traded so far is Rs 37.31 crore and Rs 20.01 crore, respectively.

Kotak Securities expects ICE Cotton to trade rangebound with a negative bias on July 21 after a sharp rally in the first session of the week. However, output concerns in the largest cotton-producing state in the US is likely to provide a good floor to cotton prices in coming sessions.