Wheat yesterday settled up 0.19% at 1584 tracking firmness in spot market demand. Only need-based buying is taking place in the market and any major alteration is unlikely at present. 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 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 short covering as market has witnessed edged up in open interest by -4.3% to settled at 10010 while prices up 3 rupee, now Wheat is getting support at 1565 and below same could see a test of 1547 level, And resistance is now likely to be seen at 1593, a move above could see prices testing 1603.

Trading Ideas:

Wheat trading range for the day is 1546-1602.

Wheat yesterday settled up tracking firmness in spot market demand.

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

India is expected to produce 93.62 million tonnes of wheat in 2013, the farm ministry forecast last month.