Wheat futures traded on a range bound trend during yesterday’s session due to lack of active participation in the market.

The active July contract made a high of 1277 levels and a low of 1268 levels l and finally settled at 1270 levels with a negative change of 0.45 per cent.

Outlook

Wheat futures are expected to trade on a lower note during the day as buyers are not interested in buying at current levels.

The wheat prices have rallied substantially over last couple of weeks. Buyers are also hopeful that the government may release the stocks in the open market soon and the prices will come down.

However, a sharp fall cannot be expected in wheat futures during the day as the supplies across major markets have declined considerably and the spot prices have risen slightly.

As far as the government does not intervene effectively, wheat prices are tend to rise because the inventories are rapidly falling with traders.

Spread:

The far month contracts (Aug and Sep) are trading higher than the current month contract, indicating contango, as decline in arrivals of grain amid good demand are expected during these months

Technical analysis

Wheat July future prices sideways and after making a high of 1258.80 it closed at 1254. Market has breached the support level of “Double top” pattern formation at 1262 sustain below the same likely to trade lower.

However, resistances are at 1268 then 1275 levels. Likewise, supports are at 1247 then 1238 levels. We expect market to trade lower and recommend selling in the range of 1258-1262

Courtesy: Karvy Commtrade Ltd.

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