July wheat traded 7 1/2 cents higher in overnight action. The dollar was sharply lower overnight.

Traders indicate that recent strength in wheat has been mainly on short covering by locals and commission houses along with profit taking by spreaders who were long corn and short wheat. In addition, there is growing concern for parts of Australia which are seeing dry weather and need rain by the end of the month to get the new crop planted. Egypt is tendering to buy 55,000-60,000 tonnes of optional origin wheat. The weekly winter wheat conditions report for the week ending Sunday showed that the overall winter wheat crop was rated 45% good/excellent compared to 47% last week and 59% last year. The 10 year average for this time of year is 51%. Kansas crop conditions continue to deteriorate despite recent rains with only 43% of the crop rated good to excellent vs. 44% last week. Spring wheat plantings showed 94% complete compared to 92% last year. The 10 year average for this time of year is 82%. The highest percent complete was 95% in 1988 while the lowest was 39% in 1995. This week's export inspections for wheat were 12.003 million bushels. Weekly inspections of 42.592 million bushels are needed to reach the USDA's projection for the current marketing year. Total sales to date stand at 92.4% of the projected total compared to a 5-year average of 92.8%. RICE: The Philippines may import 300,000 tonnes of rice from Thailand according to officials at the state grain agency.

Rains today should benefit the southwestern Plains, centering on the Texas Panhandle. More rains tomorrow are expected in the northwestern Plains with Thursday seeing rains in the central and northern Plains along with western and southern soft red wheat growing areas. This should be accompanied by much warmer temperatures by the end of the week making weather a mixed bag. Japan is tendering this week for 82,000 tonnes of wheat in a regular weekly tender. Pakistan announced two tenders last week, one for 175,000 tonnes of wheat and the other for 75,000 tonnes. The closing date for bids is June 7. Jordan is tendering for 100,000 tonnes of hard wheat from any origin with a deadline of May 28th. Iraq is tendering for at least 50,000 tonnes of wheat.