Wheat yesterday traded with the negative node and settled -0.49% down at 1420 as traders expect the government to release additional wheat from its warehouses to cool local prices. The Indian government is likely to offer 5 million tonnes of wheat from its warehouses, in addition to the 3 million tonnes offered in June, to bulk users such as flour millers at lower-than-market rates to control rising food prices. Buoyant export demand for Indian wheat, triggered by a severe drought in the world's top exporter, the United States, pushed up local prices more than 30 percent since June. In June, the government freed 3 million tonnes of wheat for sale to bulk consumers. In the following month, it allowed 2 million tonnes of wheat exports to trim its bulging stocks. Wheat stocks in government warehouses on Sept. 1 were 46.2 million tonnes, nearly three times the official target of 17.1 million tonnes. The International Grains Council (IGC) has trimmed its global wheat production forecast for 2012-13 to 657 million tonnes (mt) due to decline in output in Russia, Australia and Europe. Special Margin of 10% (in cash) on the Long Side on all the running contracts and yet to be launched contracts in Wheat have been withdrawn with effect from beginning of day Thursday, October 04, 2012. In Delhi wheat prices gained 4.05 rupee to end at 1461.25 rupees per 10 kg. In yesterday's trading session Wheat has touched the low of 1410 after opening at 1410, and finally settled at 1420. For today's session market is looking to take support at 1407.7, a break below could see a test of 1395.3 and where as resistance is now likely to be seen at 1434.7, a move above could see prices testing 1449.3.

Trading Ideas:

Wheat trading range for the day is 1395-1449.

Wheat dropped as traders expect the government to release additional wheat from its warehouses

Government is likely to offer 5 mln tns of wheat from its warehouses, in addition to 3 mln tns offered in June

Special Margin of 10% on Long Side have been withdrawn with effect from October 04, 2012.

In Delhi wheat prices gained 4.05 rupee to end at 1461.25 rupees per 10 kg.