CBOT wheat closes mixed

CBOT September wheat closed 3 1/2 cents lower at $7.90 1/4 per bushel Tuesday, supported by a late rally in corn.

Record high world production numbers from the USDA pressured wheat sharply lower at the opening.

The USDA raised its forecast for world 2008-09 production by 6.5 million tons from it's July estimate to a record 670.8 million tons. Major increases coming from the EU-27, India, Russia, Ukraine, and the US.

US 2008-09 carryout was increased to574m bushels when the trade had been anticipating a decrease to 528m bu.

The increase in carryout might be related to cheaper corn, with wheat no longer competing with corn as feed, but wheat has roughly -$1.50.bu basis while corn is around $0.40/bu. and that might suggest the contrary. Hot and dry weather remains a problem for much of the Northern Plains, stressing the spring wheat crop.

The current pace of US exports remains strong in the face of increased global supply and should prevent the market from falling much further a trader said.