Wheat yesterday settled down -0.38% at 1573 as expectations of higher production due to good monsoon rains weighed on prices. 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. 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 government aims to earn $600 million by exporting 2 million tonnes of wheat from government warehouses. In August, the government allowed the FCI to export 2 million tonnes of wheat as part of its efforts to cut down huge stocks at its warehouses. The government had allowed FCI to export 4.5 million tonnes of wheat of which 4.2 million tonnes have been shipped out, helping the government earn $1.4 billion. Technically market is under fresh selling as market has witnessed fell in open interest by 3.35% to settled at 10490 while prices down -6 rupee, now Wheat is getting support at 1567 and below same could see a test of 1562 level, And resistance is now likely to be seen at 1580, a move above could see prices testing 1588.
Wheat trading range for the day is 1562-1588.
Wheat ended with losses as expectations of higher production due to good monsoon rains weighed on prices.
Better crop prospects could put more pressure on the government to reduce bulging inventories in its warehouses.
Government has already allowed an extra 2 mln tns of exports after state-run traders sold 4.5 mln tns for overseas sales.
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