December wheat was 18 3/4 cents lower overnight. The dollar was narrowly mixed above last week’s low. December wheat traded sharply lower overnight as markets in Europe and elsewhere continued Friday’s pullback from near 2-year highs. The Russian government continues to assess damage from the ongoing drought there, and traders remain uncertain as to whether the announced ban on exports from August 15th through December 31st will have an effect on some existing export sales contracts or not. Russia’s official grain industry association said on Friday that 700,000 tonnes of grain are currently awaiting export. Some sources in Russia indicate that the government is most concerned about the loss of domestic feed to fuel its recently bolstered livestock programs, and that this could result in some feed grain imports in 2010/11. In the meantime, hot and dry conditions continue to plague Russia, and some Asian wheat traders have declared a force majeure on existing contracts for delivery to importers such as the Philippines and Bangladesh. Reports indicate that the resulting cancellations to Bangladesh may stand at 200,000 tonnes. Sources say these traders feared that they will need to replace cheap earlier purchases from the Black Sea with more expensive supplies from the US and Australia. Smaller feed mills in Brazil, the world’s second largest wheat importer, are said to be operating on a hand-to-mouth basis in the face of sharply higher costs for spot supplies. However, Egypt announced late last week that it has a 6-month supply of wheat on hand. The Commitments of Traders report for the week ending August 3rd showed moderate net buying by funds. Trend-following (managed) funds were net buyers of 6,643 contracts to decrease their net short position in wheat to 8,789. This is currently the only net short position held by these traders among US agricultural markets. Index funds were net sellers of 1,606 contracts. On Friday, December wheat traded near limit up in the overnight session before falling to a limit down close in the day session. This was far and away the largest range seen in the December contract during the July-August rally, and it came on a day when some of the panic that had gripped the wheat market on Thursday appeared to subside. Prices continued to slide overnight. India’s wheat stocks stand at 22.9 million tonnes compared to their target level of just 9.8 million according to government sources. Tunisia bought 125,000 tonnes of durum wheat on a tender for 75,000 tonnes.