December Wheat finished up 31 1/2 at 931, 28 1/2 off the high and 36 1/4 up from the low. September Wheat closed up 31 1/2 at 906 1/4. This was 36 1/4 up from the low and 26 off the high.

The wheat market rallied sharply today along with corn and the soybean complex. The December contract traded and closed at the highest level since June 27th, despite easing to well off the day's early highs late in the day. Funds were strong buyers of at least 4000 contracts by mid session. Japan bought 85,000 tonnes of wheat on its weekly tender as expected. Traders said that today's strength came from a sharply higher crude oil market and a sharply lower dollar. They noted that the late softening came on selling by spreaders against long positions in corn and soybeans. Positive sentiment also came from another very strong export sales number in wheat this morning. Net sales for wheat came in at 916,500 tonnes for the current marketing year and 15,000 for next year for a total of 931,500. Cumulative wheat sales for 2008/2009 have reached 52.2% of the USDA forecast versus a 5 year average of 37.0%. Sales of 314,000 tonnes are needed each week to reach the USDA forecast. Sales were very heavily weighted toward hard red wheat with Iran the biggest buyer there at 786,900 tonnes. On the inflation front, the USDA said that food prices will jump 5% to 6% this year. This would be the biggest increase since 1990. A number of news sources are commenting today on the latest large purchase of US wheat by Iran, their first purchase from the US in 27 years. Traders and analysts are pointing out that this is coming due to the increasingly tight outlook for high quality milling wheat due to the much lower than normal percentages of milling wheat seen for crops in the Black Sea region. Basis levels at the Gulf have failed to rally from their historically low levels along with the rally in futures according to cash market sources. Over the past two weeks, soft red basis levels at the Gulf have declined by some 25 cents.