Wheat yesterday settled down -0.51% at 1560 tracking weakness in spot due to lower demand against sufficient availability. Persisting good rainfall activities are expected to boost India's wheat production this year. India's wheat production is expected to fall 92.46 mn tons from its previous estimates of 93.62 mn tons as a result of unfavourable weather conditions in key wheat growing areas of Haryana and Madhya Pradesh, as per government estimates. With declining prices in Black Sea region and US, parity for Indian private exporters turned negative. Government of India decided to sale 10 mn tons of wheat and 500,000 tons of rice from government inventories in the open market. Wheat inventories in the country stood around 44 mn tons, more than double of the government's minimum requirement. Persisting good monsoon rainfall is expected to support higher crop output this year. India's overall wheat production for 2012-13 year is estimated to be at 96mn tons, according to the Directorate of Wheat Research (DWR). Meanwhile, country's wheat production is projected to be at 93.62 mn tons for 2012-13 (July to June) crop year, according to the third advance estimates by the Ministry of Agriculture. India's wheat output stood at 94.88 mn tons in 2011-12 crop year. Technically market is under long liquidation as market has witnessed fell in open interest by -2.64% to settled at 12900 while prices down -8 rupee, now Wheat is getting support at 1557 and below same could see a test of 1555 level, And resistance is now likely to be seen at 1565, a move above could see prices testing 1571.

Trading Ideas:

Wheat trading range for the day is 1555-1571.

Wheat ended with losses tracking weakness in spot due to lower demand against sufficient availability.

Persisting good rainfall activities are expected to boost India's wheat production this year.

India's wheat production is expected to fall 92.46 mn tons from its previous estimates of 93.62 mn tons.