July wheat was trading 15 1/2 cents lower near 7:30 am central time. Outside market forces look mixed to weaker as the stronger US dollar and weakness in gold clash with a firm equity market. The market is showing significant weakness overnight as the weekly updates did not bring any major surprises but did confirm that the crop conditions are falling off rapidly. Traders see the possibility that the Russia/Ukraine crop is small enough to spark increased demand for US wheat for the coming year. In addition, US supply may be lower than expected as hot and dry weather hits the wheat crop just ahead of harvest. The weekly Winter Wheat Conditions report showed that 58% of the crop was rated good/excellent compared to 60% last week and 32% last year. The 10 year average for this time of year is 46%. The Kansas crop dropped to 43% good/excellent from 52% last week and this was seen as the largest one-week drop in 4 1/2 years. The crop rating is down 17 points in two weeks and down 26 points from 69% good to excellent since April 15th. The Winter Wheat Harvest report showed 3% complete compared to 1% last year. The 10 year average for this time of year is 1%. The weekly Spring Wheat Planting report showed 99% of the crop is planted compared to 94% last week and 50% last year. The 10 year average for this time of year is 80%. The previous highest percent complete was 96% in 1990. The weekly Spring Wheat Conditions report showed 74% was rated good/excellent. The 10 year average for this time of year is 79%. July wheat closed higher for the sixth session in a row yesterday but well off of the early peak at 722. July KC wheat also closed sharply higher on the session and has gained as much as $1.20 1/2 off of last Monday's lows. A continued threatening weather forecast for Russia plus a hot and dry trend for Kansas for the next week or more has helped to support the solid gains. Paris milling wheat pushed to the highest level since June of 2011 and this added to the positive tone. Private exporters reported a sale of 100,000 tonnes of US hard red winter wheat to Iraq for the new marketing year. Rain is due soon for some of southern Russia and southern Volga Valley region but hot and dry weather is also in the forecast. Traders believe that the rains could help stabilize the crop temporarily but many believe that irreversible damage has already occurred with the dry spring. The problem is that the rain event this week is not widespread and only temporary. Russia officials believe the grain harvest this year will be near 89 million tonnes from 94 million last year. Wheat is 53 million vs. 56 million last year and wheat exports are now projected at 14 million tonnes from 20.5 million this year.