Wheat yesterday settled down -0.19% at 1580 as expectations of higher production due to good monsoon rains have offset the effect of a reduction in inventories by the government. There seems no wheat export opportunity from India as of now due to higher prices despite of weak rupee. 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. 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 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 1.36% to settled at 10470 while prices down -3 rupee, now Wheat is getting support at 1578 and below same could see a test of 1575 level, And resistance is now likely to be seen at 1585, a move above could see prices testing 1589.

Trading Ideas:

Wheat trading range for the day is 1576-1590.

Wheat settled flat as expectations of higher production due to good monsoon rains have offset the effect of a reduction in inventories

There seems no wheat export opportunity from India as of now due to higher prices despite of weak rupee.

NCDEX accredited warehouses wheat stocks dropped by 13 tonnes to 14022 tonnes.