December wheat traded 26 cents lower overnight. The dollar index made another new high overnight.

Wheat staged another modest rally yesterday and managed to eke out a higher close in the December contract. However, the market broke sharply overnight to finish that session below the lows established earlier in the week. Wheat lost modestly to corn yesterday and extended those losses overnight. Traders indicated that the new highs in the dollar index as well as growing fears of a worldwide economic slowdown generate a wave of selling in commodity markets that swept wheat along with it. Demand for wheat is still strong, but the rise in the dollar makes wheat more expensive on world markets and traders say that this is not sustainable in the present environment. The USDA will issue its Export Sales Report this morning, one day late due to the Labor Day holiday. Deliveries against the September wheat contract were 1,230 contracts today. The EU granted licenses to export 804,000 tonnes of wheat this week which looks heavy. Since the start of the season in June, export licenses have been granted for 3.6 million tonnes, well above the 1.4 million last year at this time.

US weather is a negligible factor this morning despite the expectations of some rains in the eastern spring wheat belt and the eastern plains in Canada. There continues to be a lack of rain in the forecast for major wheat growing areas in Argentina. 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.