Overnight, December corn traded up 34 cents as of 7:30 am CST. Corn bulls came back into the market at the 5 pm opening bell after profit taking on Friday. Bull spreads are working this morning as money dumps back into the front-end contract options at the expense of 2013 contracts. July corn is losing to September corn. No deliveries were made in July corn as of Friday, July 6th and open interest is near 9,000 contracts. Total open interest grew 3,293 on Friday, despite the lower trade. Dalian November corn trade up.80%. CORN: Following a brief setback on Friday, the corn bulls reloaded on Sunday evening to post fresh highs for the move at 7.28 3/4. The corn market continues to brush off outside market weakness as stocks fall back and the U.S. Dollar forges ahead. Brutal triple digit temperatures last week and a July weather outlook that continues to show above normal temperatures and below normal rainfall continue to provide ammunition to the bull camp and punish the bears. Temperatures began to retreat on Saturday night for most of the Corn Belt as a cool front moved in. Showers were seen in parts of Kansas, Nebraska, Iowa, Southern Illinois, the Southeastern U.S., and areas of the Delta. Accumulation was sub par and the systems rather unorganized. This morning, rain is moving through southern parts of the Midwest. While the rain and cooler temperatures are certainly welcome for these regions of the Corn Belt, the higher trade overnight reflects doubts that it is too little, too late for some areas. Reports suggest that 1-3% yield loss per day was assumed last week as 100 degree temperatures literally baked corn crops. St. Louis, MO registered 10 straight days of 100 degree temperatures. The trade will key on the percentage of pollinated corn for states like Iowa, Illinois, Indiana, and Nebraska. Cooler temperatures should prevail across this strip of land but drier conditions will persist, only adding to the stress of the crops. The National Weather Service 6-10 day maps show above normal temperatures from Nebraska to Virginia, and stretching from the Gulf Coast to the North Dakota. The 6-10 day precipitation map shifts rainfall to the east coast, Texas, and southern Oklahoma, while leaving the northwestern third of the Corn Belt with below normal precipitation. All eyes will be on the USDA report Wednesday as the trade begins to adjust yields, harvested acreage, and demand lower. The current USDA yield being used is 166 bushels/acre, and most feel an adjustment below 160 bushels/acre is needed, at a minimum. The USDA historically does not drastically adjust the yield on the July 11th report; however this year's situation certainly calls for drastic measures to be taken. Domestic and export demand remains sluggish and it's now being rumored that close to 20 boats of Brazilian corn are expected to make their way into the Wilmington, NC port from August through April. No confirmation of this business has been made at this point in time. The Commitment of Traders and updated Crop Conditions Report will be released later this afternoon. The market expects another 5-8% to be taken off the good/excellent rating for corn. A revision higher than 8% is not out of the question. The Commitment of traders report will likely show another week of heavy hedge fund buying as open interest finally begins to creep higher each day. Funds finally have news that they can sink their teeth into and the fact that major banking institutions have begun ratcheting price projections higher for 3-6 months out, only adds to their confidences for a continuation of the higher move. It seems the uncertainty of how truly bad the corn conditions are keeps bears on the sidelines, and all they can do is watch.
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