December wheat traded 11 3/4 cents lower overnight. The US Dollar was mixed overnight.

Wheat rallied sharply yesterday along with corn and soybeans on good buying by funds. Prices eased somewhat into the close, and this was followed by further weakness overnight. Export demand remains firm with yesterday's export inspections at the highest levels since last September-October at over 36 million bushels. Inspections need to average just over 17 million bushels each week to reach the USDA's projection for the current marketing year. The crop outlook in Australia remains somewhat mixed with private analysts still raising estimates from 3-6 weeks ago when conditions caused many to lower their numbers. Rains improved the outlook 2-4 weeks ago, but dryness seems to be reemerging in eastern growing areas. The weekly Spring Wheat Harvest report in the US showed 35% complete compared to 16% last week and 67% last year. The 10 year average for this time of year is 51%. The weekly Spring Wheat Conditions report showed 56% rated good/excellent compared to 53% last week. The 10 year average for this time of year is 53%. The weekly Winter Wheat Harvest report showed 95% complete compared to 92% last week and 99% last year. Japan is looking to buy 85,000 tonnes of wheat on its regular weekly tender. Pakistan has postponed a tender for 250,000 tonnes of wheat with government expectations that local output will reach demand for the current season.

Weather is expected to be mainly dry across the spring wheat belt through Monday with the exception of some rains in central growing areas on Friday. A private miller in Malta is tendering for about 14,000 tonnes of wheat.