December wheat traded 14 1/4 cents higher overnight. The dollar index was sharply higher again this morning.

Wheat opened lower yesterday and moved to sharply lower levels into the close along with corn and the soybean complex. However, unlike those markets, wheat did not finish limit down yesterday. The December wheat contract extended yesterday's low to start the overnight session, but this early break was followed by a rally to higher levels. The turmoil in credit markets and the resulting sharp sell offs in equity markets yesterday is the major story line that traders are following this morning. Some traders are also looking at the number of contracts held by index funds (over 165,000 contracts in the case of Chicago wheat) and questioning whether we will see substantial liquidation in those positions by investors in coming days and weeks. Other traders suggest that commodities could attract investors who are exiting positions in equity markets. The USDA will issue its Quarterly Stocks Report this morning. In the case of corn and soybeans these numbers coincide with ending stocks. In the case of wheat, the stocks number provides greater insight into usage over the past three months as well as overall crop size. In the vein, the USDA will also release a Crop Production Report for small grains this morning including wheat. This is essentially a final estimate of the wheat crop that was harvested this past spring and summer. The weekly Winter Wheat Planting report showed 42% of the winter wheat crop planted compared to 22% last week and 38% last year. This is mostly hard red (KC) wheat with soft red planting at 9% complete in Ohio, the largest soft red wheat producing state. Weather forecasts remain favorable to a rapid planting pace on the Plains. Soft red planting in the Midwest is dependent on the rate of harvest for summer crops.

Weather forecasts continue to call for mostly dry and cool weather in both hard and soft red all major winter wheat areas this week. Jordan is tendering to buy 100,000 tonnes of hard wheat. Bangladesh is tendering for 100,000 tonnes with a closing date of October 10th.