Wheat yesterday settled up 0.7% at 1590 due to weak arrivals of wheat in local mandies along with strong demand of private millers at higher levels. The government has given an approval for export of 2 million tonnes of wheat from the bulging stock lying down in warehouses. The base price for wheat this year will be $ 300 a tonnes compared to $280 a tonnes in the previous year. Further, the country is likely to export 4.5million tonnes wheat in the 2012-13 season. 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. As per the latest release from the Food Corporation of India (FCI) , the agency has procured around 24 million tonnes of wheat from all the producing states, down almost 17 % from the corresponding period last year the. Traders estimated that India's overall procurement is expected to be around 25-26 million tonnes against the initial target of 44 million tonnes. 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. Technically market is under short covering as market has witnessed edged up in open interest by -5.65% to settled at 6680 while prices up 11 rupee, now Wheat is getting support at 1579 and below same could see a test of 1568 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 1567-1603.

Wheat gained due to weak arrivals of wheat in local mandies along with strong demand of private millers at higher levels.

The government has given an approval for export of 2 million tonnes of wheat from the bulging stock lying down in warehouses.

Technically market is under short covering as market has witnessed edged up in open interest by -5.65% to settled at 6680