The December wheat contract was 1 1/4 cents higher overnight. The dollar was mostly lower overnight, but losses were minor.

Wheat traders returned to the sell side yesterday, but prices staged a modest rebound overnight. One trader noted that wheat was trading higher for the week as of this morning despite the weather-related selling that has battered soybeans and, to a lesser extent, corn since mid week.

In Australia's big wheat-producing state of New South Wales, the government has reduced the local wheat crop to 6.66 million tonnes which is down 18% from the previous report. This is due to dry weather and a damaging frost. New South Wales typically produces 30% of Australia's wheat crop.

Brazil's National Commodities Supply Corporation (Conab) said yesterday that its 2009-10 wheat crop may be 14.3% lower than last year at 5 million tonnes. Brazil is one of the world's largest importers of wheat. US export sales in wheat were below the low end of trade expectations on yesterday morning's report.

As of October 29, cumulative US wheat export sales stand at 54.1% of the USDA forecast for 2009/2010 versus a 5 year average of 64.5%. The slow pace may cause the USDA to lower their wheat export forecast for next week's supply/demand report. Last month, the USDA lowered their wheat export forecast to just 900 million bushels as compared with 950 million the previous month, 1.015 billion the previous year and 1.263 billion bushels for the 2007/08 season.

Egypt bought 120,000 tonnes of wheat yesterday. Of that total, 60,000 tonnes were from Russia and 60,000 tonnes from France.