December wheat traded 7 1/4 cents lower overnight. The US Dollar was lower again overnight.

Wheat prices sagged again yesterday with the December contract closing lower for the 5th straight day. Prices were lower again overnight, but the December contract failed to take out yesterday's lows. Funds were sellers yesterday of about 3000 contracts. Forecasts in Australia call for good rains this weekend in New South Wales, which sources say may once again revive prospects for a bumper crop there. Wet harvest weather in the Canadian plains has slowed progress in recent days, and more rains are expected over the next five days. Japan will raise the price that domestic millers pay the government for imported wheat by 10% starting in October. This is expected to allow the government to recover about half of its increased costs. The rise is being kept to "just" 10% in order to cool inflationary pressures in the food sector there. Basis levels remain weak at the Gulf for soft red wheat in contrast to corn, soybeans and hard red wheat. Corn and soybeans have very tight supply pipelines, and hard red wheat basis levels reflect good demand for high protein wheat. Soft red is seeing moderating demand amid ample supplies and willing sellers. Reports continue to confirm the large supplies available in the Black Sea basin, with Bulgaria expected to load 1.6 million tonnes of exports by the end of this year. Today is first notice day in the September contracts. Deliveries in wheat were 4032 contracts, which was considerably higher than expectations.

Rain is expected in a small patch of the central spring wheat belt in the US today with dry conditions after that until Monday and Tuesday. Wetter weather is expected in the Canadian plains into next week. Good rains are forecast for dry areas of New South Wales in Australia, which may revive ideas of a bumper crop. Turkey is tendering for 250,000 tonnes of wheat including 50,000 tonnes of soft wheat. They are also tendering for 50,000 tonnes of durum. Syria is in the market for 120,000 tonnes of soft wheat from any origin. Jordan has also issued a fresh tender for 100,000 tonnes of wheat.