September wheat was down 4 cents late in the overnight session. Outside market forces look positive with a lower US dollar and strength in some other commodities and the equity market, but news of further tightening measures in China is seen as somewhat negative. The market appears to have already absorbed the potential loss of spring wheat acres in the US, as improving conditions in Europe and Russia have helped keep the market in a steady downtrend since late May. The advancing winter wheat harvest and fund long liquidation selling have been seen as negative forces. The weekly Crop Progress Report showed that just 88% of the spring wheat crop was planted as of Sunday, compared to 79% last week and 100% last year. The 10 year average for this time of year is 100%, and we have moved past insurance dates. The previous lowest percent complete was 96% in 1999. North Dakota was 82% planted and Montana 83%, both record lows. The spring wheat crop was rated 68% good/excellent compared to 86% last year. The 10 year average for this time of year is 72%. The winter wheat crop is now 22% harvested compared to 10% last week and 10% last year. The 10 year average for this time of year is 13%. Drought has pushed progress ahead of normal. The crop is rated just 35% good/excellent compared to 34% last week and 66% last year. The head of the Russian Grain Union indicated overnight that Russia may export nearly 8 million tonnes of grain for the July to September time frame. Russia may harvest 85 million tonnes this year if weather remains favorable. Ideas that weather improvements for Europe and especially for the Black Sea region will help to support improving wheat crop conditions and increased competition for US exports helped to push the market sharply lower on the session yesterday. The early rally to well above Friday's highs failed to hold, and sellers turned active. The outlook for more rains in North Dakota, which would cause producers to lose spring wheat planted area, plus increased talk of improved demand for feeding wheat this year due to its discount to corn helped support the higher trade early. However, expectations for good harvest weather this week for the winter wheat crop and slow export demand helped to pressure. Weekly export inspections, released during the session yesterday, came in at 23.9 million bushels, which was near the low end of expectations and compares with 20 million bushels necessary each week to reach the USDA projection for the year. Dryness and high winds are slowing Argentina's plantings pace for the new season. Argentine officials authorized another 200,000 tonnes of wheat for export for the 2010/11 season, which pushed approvals to 7.6 million tonnes. They also authorized the export of 3 million tonnes for the 2011/12 season for shipment starting in December. Algeria is tendering to buy 50,000 tonnes of optional origin milling wheat.
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