December wheat was 1 cent lower overnight.

Wheat broke sharply yesterday along with corn and soybeans, but wheat traded higher during much of the overnight session before finishing just 1 cent lower. Traders indicate that harvest progress over the weekend helped to pressure wheat yesterday, but they note that moderate to heavy rains this week in many soft red harvest areas may again delay harvest progress. The weekly spring wheat conditions report showed 69% of the crop rated good to excellent compared to 74% last week and 78% last year. The 10 year average for this time of year is 66%. The weekly winter wheat harvest report showed 52% complete compared to 36% last week and 53% last year. The 10 year average for this time of year is 64%. The Commitments of Traders Report showed mixed activity by funds in wheat, with trend-following funds net buyers of 3,514 contracts to remain net short by 19,790 contracts. Index funds were net sellers of 1,411 contracts. Small traders were net sellers of just 149 contracts to remain net short by 23,483 contracts. Deliveries against the July contract totaled 145 contracts this morning. China's National Grain and Oils Information Centre indicate that the winter wheat harvest is complete, with output pegged at 107.6 million tonnes, up 2.1% on the year. The entire 2008 crop is pegged at 112.5 million tonnes, up 2.4% from last year. Bulgaria production is pegged at 3.8 million tonnes from 2.4 million last year. Funds were noted sellers of near 4,000 contracts.

Rain is expected at various points this week in both soft and hard red wheat harvest areas. Kansas should see general rains today and tomorrow with the focus of rain shifting to eastern Kansas into the end of the workweek before returning to northern Kansas and Nebraska into the weekend. In soft red areas, rain is expected generally across all harvest areas today and tomorrow, with the exception of eastern Ohio. Clearing is expected through Saturday with a return of the rains in all soft red harvest areas on Sunday and Monday. Temperatures should be normal to above normal throughout the week. Iraq is still tendering for 50,000 tonnes of optional origin milling wheat. Bangladesh is tendering for 100,000 tonnes of wheat for September delivery. Jordan tendered for 100,000 tonnes of hard wheat. Oman is in for 120,000 tonnes at the end of July.