September wheat was down 4 cents late in the overnight session. Outside market factors are supportive for wheat today with a sharply lower US dollar and record high gold prices. The market traded outside of the range of the previous nine trading days yesterday to close near the high end of the 2 1/2 week trading range. European markets were up 1.9% overnight trying to play catch up from the surge higher in US prices yesterday. In addition, European wheat is higher on concerns for the quality of the crop harvest in Germany, with more rain in the short-term forecast. Traders believe that the USDA reports in August are likely to show a jump in world production, and much of the increase is expected to come from Russia, Ukraine and Europe, all aggressive export competitors with the US. Adjustments lower in yield and planted area for the US spring wheat crop could give the US supply/demand news a positive tilt next week. The head of the Russia Grain Union indicated that Russia could export 3.5 million tonnes of grain in August, which would far exceed the previous monthly record of 2 million tonnes in July. When the corn market took off to the upside yesterday, September wheat saw an increase in fund short-covering that seemed to feed on itself and drive the market from its lowest level since July 13th early in the day at 664 1/4 to close sharply higher on the day at 718. This was the highest close since June 15th. The recent Commitment-of-Traders report showed that trend following fund traders (non-commercials less index funds) were holding a net short position of 48,825 contracts. Traders believe part of yesterday’s rally was fueled by short-covering. Higher corn values could support increased feed usage for wheat, and a short corn crop could force a surge in wheat feeding in the US and in many other major corn importing countries. Iraq is tendering to buy at least 100,000 tonnes of wheat