Wheat yesterday settled up 0.63% at 1591 tracking firmness in spot demand due to weak arrivals in local mandies along with strong demand at higher levels. Wheat stocks at government warehouses fell 4.5 per cent from June to 42.4 million tonnes, government data showed, but still reflected overflowing grain silos. India, the world's second biggest grower of wheat and rice, needs to maintain wheat stocks of 17.1 million tonnes, when the new crop year starts, for its programmes to provide cheap grains to the poor. Higher than expected projections on world wheat production also pressurize the commodity movement in the global market. Persisting good monsoon rains are expected to support wheat crop this year.  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. Now Wheat is getting support at 1584 and below same could see a test of 1578 level, And resistance is now likely to be seen at 1597, a move above could see prices testing 1604.

Trading Ideas:

Wheat trading range for the day is 1578-1604.

Wheat gains tracking firmness in spot demand due to weak arrivals in local mandies along with strong demand at higher levels.

Wheat stocks at government warehouses as on July 1 fell 4.5 per cent from June to 42.4 million tonnes.

NCDEX accredited warehouses wheat stocks gained by 49 tonnes to 16444 tonnes.