July wheat traded 5 3/4 cents higher in overnight action. Outside markets were mixed.

Wheat has remained in a narrower trading range over the past several days, just above the lows established late last week in the July contract. Cash markets have been quiet and featureless according to cash market traders, with some spotty evidence of weakening basis levels ahead of the winter wheat harvest. Export markets have also been quiet of late, with the exception of the unexpectedly large purchase of 300,000 tonnes of US wheat by Iraq that was announced earlier this week. Wetter weather in the Plains over the past two days and in parts of the northern Plains overnight has been mainly beneficial to the hard red winter crop, but rains yesterday and today in the soft red wheat belt along with forecasts for more unneeded rain this weekend and later next week are just starting to cause concern over potential deterioration of crop conditions in some soft red areas. Deliveries against the May Chicago wheat contract today were 161 contracts. Traders believe that this first estimate for the 2008/09 ending stocks, for release tomorrow morning, could be as much as 200 million bushels above the historically tight 2007/08 ending stock level of 242 million bushels. In addition, world production is expected to jump sharply from last year to 630-650 million tonnes from just 606.7 million last year. Traders suspect a US crop about 12% over last year. RICE: The July contract finished limit up yesterday on concerns that the destruction in Myanmar will cause spot shortages in export markets in South Asia and western portions of Southeast Asia. Deliveries in rice today were 8 contracts.

Rains moved out of the southern Plains yesterday and overnight, but substantial rains fell overnight in South Dakota. More rains are expected Friday and Saturday in the central and southern Plains. This should bring continued improvement to hard red wheat crop conditions. The bigger story is now getting to be the continued rains in soft red growing areas to the east of the Plains. A system is moving through most soft red areas right now and this should be followed by two more rounds of rain, first on Sunday and then again on Wednesday and Thursday. The continued wet weather is just starting to become a problem for soft red wheat. Iraq bought 300,000 tonnes of US wheat this week. For the second week in a row, Japan will not tender for wheat this week due to national holidays. Their next scheduled tender will be next week. Bangladesh is tendering for 100,000 tonnes of wheat for June delivery.

Weekly export sales for wheat, released before the open, came in at 178,800 metric tonnes for the current marketing year and 312,900 for the next marketing year for a total of 491,700.