December wheat traded 9 1/4 cents higher overnight. The dollar was mixed to higher.

Wheat staged a modest rally yesterday in the face of losses in soybeans and corn. Traders said that the strength in wheat came on a lack of selling by funds in comparison to fund selling in corn and the soybean complex early yesterday. Spreaders were also said to be actively buying wheat against both corn and soybeans. Overnight action was higher again with traders citing a lack of sellers as well as strong export demand that manifested itself yesterday as Egypt returned to the market with a large purchase of 292,500 tonnes that included 120,000 tonnes of US soft red wheat. Traders said that this was particularly supportive in that the shipping dates are for the first half of October, which shows urgency as well as good overall demand. Traders also noted that trend following funds are still large net shorts in Chicago wheat and have shown a continued interest in reducing that net short position over the past several weeks. Rain is expected today in the western US spring wheat belt and in the central Canadian prairies. Private forecasts of the Australian wheat crop continue to come in below the USDA's current estimate of 25 million tonnes with many estimating the crop at about 21-23 million tonnes compared to forecast earlier this year of near 25-26 million tonnes. Deliveries against the September contract today were moderately heavy again at 1,666 contracts.

Spring wheat areas may see additional rain on Friday and again on Sunday, slightly slowing the otherwise rapid rate of harvest. Much of the Canadian wheat belt is expected to be dry today, but a new system is moving in from the west today, and that is expected to spread eastward through Friday causing further delays there. Japan bought 76,000 tonnes of wheat on its regular weekly tender. Egypt bought 292,500 tonnes of wheat that included 120,000 tonnes of US soft red wheat. 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 for a total of 300,000 tonnes of wheat. Syria is in the market for 120,000 tonnes of soft wheat from any origin. Bangladesh has also issued a fresh tender for 100,000 tonnes of wheat.