December wheat traded 23 cents lower overnight. The dollar index was sharply higher overnight. Financial and energy markets were sharply lower.

Wheat closed lower yesterday on a day that corn and soybeans staged moderate short-covering rallies amid light to moderate volume. Traders said that the decline in wheat was due to evening up by spreaders who were long wheat and short corn as well as expectations of another jump in world production estimates on this morning's USDA reports. Prices were lower again overnight in a sharp sell off in most markets following yesterday's late plunge in US stocks. This morning's reports are expected to show increases in Canadian production and possibly further increases in Europe and the Black Sea Region as well. However, traders indicate that strong export sales may result in an upward adjustment in projected exports. This along with the higher feed usage implied on the Quarterly Stocks Report may bring a lower ending stocks projection for wheat, according to analysts. The tender calendar has picked up again for wheat, and export sales remain strong. Japan restarted its weekly tenders and bought 51,000 tonnes of wheat and barley. Yemen bought 100,000 tonnes of wheat. Yesterday, Tunisia bought 92,000 tonnes of soft wheat and Bangladesh bought 100,000 tonnes of wheat from Black Sea origins. Perhaps the most interesting development on export markets yesterday came with Saudi Arabia's purchase of 300,000 tonnes of optional origin wheat of various classes. They announced earlier this year that they would start scaling back their own production of wheat to save water and start importing it instead. This week's export sales also were strong again despite reports that US wheat is once again suffering a price disadvantage to Black Sea origin wheat. Net sales for wheat, came in at 512,000 tonnes for 2008/09 and 53,800 for next year for a total of 565,800. Cumulative wheat sales stand at 64.5% of the USDA forecast for 2008/2009 versus a 5 year average of 53.8%. The biggest total was for White Wheat followed by soft red.

Rain is expected in the northern Plains today and tomorrow with rain and snow possible along the western edge of the Plains into Sunday. This may slow late planting, but rain will be beneficial in some dry areas to the west in terms of early crop development. Soft red areas will see rain on Sunday and Monday. Japan bought 51,000 tonnes of wheat and barley. Yemen bought 100,000 tonnes of wheat. Yesterday, Tunisia bought 92,000 tonnes of soft wheat and Bangladesh bought 100,000 tonnes of wheat from Black Sea origins. Saudi Arabia purchased 300,000 tonnes of optional origin wheat of various classes. Iran has announced that it is in the market for 60,000 tonnes of wheat from Australian origins. Mauritius is tendering to buy 47,000 tonnes of wheat flour from any origin.