Wheat yesterday settled down -0.44% at 1581 as expectations of higher production due to good monsoon rains weighed on prices. Better crop prospects could put more pressure on the government to reduce bulging inventories in its warehouses. The government has already allowed an extra 2 million tonnes of exports earlier this month after state-run traders sold 4.5 million tonnes of wheat for overseas sales. In June, the government allowed 9.5 million tonnes of extra sale in the domestic market as part of its efforts to cut down inventories. India grows only one wheat crop a year, with plantings in September-October and harvests from March. India allowed an extra 2 million tonnes of wheat exports via state-run trading firms with a floor price of $300 a tonne, a level private traders believe is too high to help the government boost shipments to cut down huge stocks of the grain. India is expected to produce 93.62 million tonnes of wheat in 2013, the farm ministry forecast last month. This is the sixth straight year when wheat production is seen exceeding demand. The latest output estimate is lower than last year's record 94.88 million tonnes, but more than the annual consumption of about 76 million tonnes. Technically market is under fresh selling as market has witnessed fell in open interest by 6.26% to settled at 10360 while prices down -7 rupee, now Wheat is getting support at 1578 and below same could see a test of 1574 level, And resistance is now likely to be seen at 1588, a move above could see prices testing
1594.

Trading Ideas:

Wheat trading range for the day is 1575-1595.

Wheat ended with losses expectations of higher production due to good monsoon rains weighed on prices.

Better crop prospects could put more pressure on the government to reduce bulging inventories in its warehouses.

NCDEX accredited warehouses wheat stocks dropped by 1183 tonnes to 14035 tonnes.