December wheat traded 6 cents higher overnight. The US Dollar was higher overnight.

Wheat was the leader to the upside among the grain markets yesterday, with good fund buying noted for the second day in a row. The overnight session was also higher, with firmness seen into the close of that session led by the December contract. Traders are noting increased problems in Argentina, as dryness in northern growing areas continues to stress that country's wheat crop. The USDA's Export Sales Report is due out this morning. Traders are expecting a very large total this week, which stands in contrast to the tender calendar, which appears to have gotten lighter over the past week. The acceleration in demand is a normal seasonal trend, but traders note that world stocks/usage rates are still near the low end of the historic range for 2008/09, and recent reports of lower than normal percentages of milling quality wheat in Ukraine and elsewhere in Europe reduce the availability of milling quality wheat to even lower levels. The Indian government said today it was freeing some wheat stocks for release into domestic markets in order to curb inflation. The German wheat harvest continues to advance, with one trade association saying this year's crop is up 17.5% over last year. This would not be a new record.

Mostly dry conditions are expected in US spring wheat areas into Monday. Argentine wheat areas are still very dry. Japan bought 85,000 tonnes of wheat on its weekly tender as expected. Weekly export sales for wheat, released before the open, came in at 916,500 metric tonnes for the current marketing year and 15,000 for the next marketing year for a total of 931,500.