"People are liquidating in Kansas City, and they are an anchor on us. They are weighing us down," one Chicago wheat trader said.
The latest CFTC Commitments of Traders report showed that funds were heavily net long in Kansas City wheat futures, leaving the market open to long liquidation.
Funds were net short Chicago wheat, and short covering lifted CBOT wheat early in the session.
CBOT December wheat closed flat at $3.17 per bushel after trading both sides of unchanged and falling at one point to a contract low at $3.14-1/2, below the previous low of $3.15. Deferred months ended up 1/2 to down 1 cent.
Funds were net even on the day, traders said.
Volume was estimated by the exchange at 43,934 futures and 5,525 options.
Wheat had early support from ideas the market was oversold after recent declines, including a sharp break last week. The nine-day relative strength index for December stood at 29 after Monday's close. Technical traders consider an RSI of 30 or lower as one indicator of an oversold market, while an RSI of 70 or higher signals an overbought market.
On the bearish side, US crop weather was satisfactory for winter wheat growth. The US Department of Agriculture late Monday said 61 percent of the US winter wheat crop was in good to excellent condition, up from 57 percent the previous week.
The total was down from the year-ago figure of 78 percent in the good-to-excellent categories.
USDA said the crop was 92 percent planted and 76 percent emerged, ahead of the respective five-year averages of 88 percent and 73 percent.
Export news was quiet other than Taiwan setting a tender on Thursday to buy 91,850 tonnes of US wheat.
Dry weather will prevail over the next five days in the US Plains hard red winter wheat region, a private forecaster said. But recent rain in southern areas of the belt may help to improve the condition of this year's crop.
"They did get a little bit of rainfall the last couple days, so that should help improve the conditions in both Oklahoma and north Texas - but they could use some more rain," Meteorlogix forecaster Joel Burgio said.
Cash basis bids for soft red winter wheat were steady to firm in the US Midwest.