July corn is trading 4 cents lower this morning as storm systems roll through the western Corn Belt. December corn is down 6 cents and trading 7 cents off its overnight lows into 7:30 est. Negative economic news out of China mixed with a marginally higher U.S. Dollar has kept bulls on the sideline overnight while profit taking takes place. The outside market tone is offering a slightly negative bias, with the Euro trading weaker against the U.S. Dollar and August crude oil slumping 1 percent in early trade. Corn bulls look to be taking a breather overnight as the December contract moves modestly lower towards 560. Chinese PMI printed at 48.1 overnight, signaling contractions in the commodity markets growth engine and the Fed offered nothing in the way of positive news in respect to the US economy. Sharply lower trade in the energy sector following yesterday's EIA report and better rainfall in the western Corn Belt has corn bulls taking profits after 3 straight days of higher trade. The September vs. December corn spread traded weaker overnight with September corn only a 2 cent premium to December. While the market is well aware of the tight, old crop corn situation, it seems much of the focus has now shifted to the condition of the next year's crop. Basis levels remain firm in key delivery points with central Illinois processors paying 60 to 70 over the July corn contract. Storm systems are sweeping through southeastern Kansas, western Missouri, and southeastern Iowa this morning. Parts of Iowa were the beneficiary of 0.25 to 1 inch of rain overnight, before the rainfall shifted northeast towards Minnesota and Wisconsin. The 11-15 day maps continue to call for cooler temperatures for much of the Corn Belt, but below average rainfall. US exports will come into focus today with the estimates falling in around 550,000 tonnes for the weekly update. Fundamentals remain bullish for corn but Iowa and Missouri saw fractional gains in precipitation overnight. The eastern Corn Belt continues to miss rainfall as pollination for nearly 20 to 30 percent of the corn crop is right around the corner.
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