July corn posted 9 cent gains overnight while it flirts with the high end of the range this morning. December corn is also 9 cents higher, or 1.75% on light overnight volume. Dalian corn was down slightly overnight. US Stocks indices are trending higher this morning and mixed outside markets are providing supplemental support to corn after yesterday's sharply lower trade. The corn bulls made their way back into the market overnight after yesterday's sharply lower trade. Fears of yield destroying temperatures and lower than normal rainfall continue to lead the corn complex higher. Total open interest in corn fell 17,980 yesterday, signaling profit taking from this week's sharply higher trade. The corn bull camp continues to have the edge with weather conditions that prove detrimental to yield in areas where corn pollination has already begun. On the other hand, sluggish export sales released yesterday and discounted grain available in South America is tempering the demand side of the balance sheet. Slow weekly export sales, a purchase of 45,000 tonnes of Brazilian corn by Israeli private buyers, and the ratio of corn in Japan's livestock feed production falling to its lowest level in the past two decades are clear indications that U.S. corn market is beginning to ration demand. Central Illinois corn basis dropped sharply yesterday (-25 cents) and basis in the Gulf of Mexico was steady but well above the last year and the 3 year average. Regardless, the corn complex is entrenched in a weather market at the moment which leaves it vulnerable to higher highs with each day of drier than normal conditions. Showers stretched across eastern South Dakota and part of northwest Iowa this morning but coverage and accumulation was minimal. A narrow strip of showers was noted overnight from west central Indiana to northwestern Ohio. These were not crop saving rains but the cooler temperatures into this weekend, for much of the Midwest, will offer limited relief to crops. Timely rainfall is expected for the lower Midwest next Wednesday and into Friday morning, followed up with another chance for rain the last couple days of June and first few days of July. If these systems produce, it will likely ease crop stress but more will be needed. Trend line yield is unlikely for much of the eastern Corn Belt if any of these rain events fall apart. Crop progress reports on Monday will most certainly be dragged lower for corn after this week's disappointing weather.
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