July wheat was trading near 8 1/2 cents higher near 7:30 central time. Outside market forces look weak today with a lower stock market, a higher dollar and weakness in energy and metal markets. The market is seeing some recovery bounce from the bearish technical action of late last week. Fund traders seem to be building another very large net short position in wheat just as the harvest moves past the half-way mark and the USDA expects declining ending stocks for the US and the world for the 2012/13 season. July wheat closed 14 lower on the session Friday and pushed down to the lowest level since May 16th. Funds were active sellers even with a positive tilt to outside market forces. Weakness in corn and political uncertainties for Europe helped to pressure the market and there was a lack of buying interest from speculators. The move below the June 1st lows is seen as a negative technical development. European wheat futures were down Friday but were higher this morning. Talk of better weather for Western Europe and some weekend rains for Russia for southern growing areas has helped to pressure. However, crop uncertainties persist for the Black Sea region which may need to absorb high temperatures ahead and traders are also questioning the crop outlook for China wheat due to too much rain. Iraq bought 250,000 tonnes of wheat from Australia, Russia and Canada. South Korea bought 23,500 tonnes of US milling wheat. The Commitments of Traders reports as of June 12th showed Non-Commercial traders were net short 11,131 contracts, an increase of 2,758 contracts for the week and the selling trend is seen as a short-term negative force. Trend-following fund traders (non-commercial less index funds) are now net short 57,102 contracts, up 5,431 for the week as compared with the record net short from earlier this year at 97,259 contracts. In other words, oversold but not near the record. Non-Commercial and Nonreportable combined traders held a net short position of 36,996 contracts, up 2,921 for the week and the selling trend is a bearish force. In KC, Non-Commercial traders were net long just 14,154 contracts.