July wheat was down 1 3/4 cents late in the overnight session. Outside market forces are positive led by a weaker US dollar. Improving crop weather for Europe and expectations for a still hefty world ending stocks outlook for the coming year has helped to drive July wheat to its lowest level since May 17th, all ahead of the USDA crop production and supply/demand reports on Thursday. This is in sharp contrast to Minneapolis wheat, which saw a downside reversal into the close yesterday after first hitting contract highs and moving to its highest level for a nearby contract since July 2008. The weekly Crop Progress Report showed that 79% of the spring wheat crop was planted as of Sunday, compared to 68% last week and 97% a year ago. The 10-year average for this time of year is 96%. The previous record low pace was set in 1996, 90% planted by this date. Much of the unplanted acres are likely to switch to other crops such as soybeans. The report also showed ath 10% of the winter wheat crop was harvested, compared to 4% last year. The 10-year average for this time of year is 6%. Talk of higher than expected yields for soft red areas has helped to pressure the Chicago market. The report also showed that 34% woth the winter wheat crop was rated good/excellent compared to 33% last week and 66% last year. The 10-year average for this time of year is 45%. Iraq is expected to import an additional 1 million tonnes of wheat for 2011. Production this year is expected to be 2.0-2.2 million tonnes, compared to just 628,000 back in 2008. Russia may export nearly 13 million tonnes of wheat this year. Drought conditions in the southern US winter wheat areas are expected to result in further revisions lower for production in the report on Thursday. Traders expect the winter wheat production forecast to be down about 30 million bushels from the May USDA estimate of 1.424 billion, with a drop of 20 million busheld in hard red production and 10 million in soft red. For the supply/demand report, old crop ending stocks could show a slight increase of about 5 million bushels from the 839 million estimated last month. For the 2011/12 season, ending stocks are expected to come in about 40-45 million bushels below last month’s forecast of 702 million, due to lower production. This is still higher than the 306 million from the 2007/08 season and higher than every year from 2002/03 through 2008/09. July wheat closed sharply lower on the session yesterday and saw its lowest close since May 16th. Good weekend rains for France, Germany and the UK, which are the EU’s largest wheat producers, helped drive the market sharply lower. Weakness in European wheat and weakness in other agricultural markets added to the negative tone. Weekly export inspections, released during the session yesterday, came in at 22.36 million bushels, which was below trade expectations. Shipments need to average 20.1 million each week for the brand new crop season to reach the current USDA forecast. Algeria bought 600,000-650,000 tonnes of milling wheat at their tender. While Chicago and Kansas City wheat traded sharply lower on the session, July Minneapolis wheat was up as much as 59 1/2 cents on the day to a new contract high of 1120 before closing lower on the day with an 88 cent range.