July corn was trading 14 cents higher into 7:30 AM central time. Outside market forces look slightly positive this morning with a recovery bounce in equity markets and a weaker US dollar. The market recovered some of the late losses from Friday after the aggressive selling on Friday drove the market down to the lowest level since December of 2010. Weekend rains came in below expectations and this helped to support the bounce overnight. There are scattered and light rain events in the forecast this week and next week and the Midwest could turn warmer than normal next week as a ridge appears for a few days. Traders believe that this will not be enough to avoid some stressful dry conditions for parts of the Midwest; especially the southern third, into mid-June. There continues to be rumors that China may have bought corn on the break last week with 300,000 tonnes emerging as a possibility. Traders see a further decline of 1-2% in the weekly crop conditions report for crops rated good to excellent for this afternoons update. Brazil exports in May came in at 165,700 tonnes from 103,600 in April and 60,700 tonnes last year. July corn saw volatile trade on Friday to close modestly lower for the day and sharply lower for the week and 26 cents off the highs of the day. December corn saw a solid rally into the mid-session but pushed lower on the day late in the session after some midday weather models showed a wetter trend in the 6-10 day outlook. A lack of follow-through selling, especially after the poor export sales news and poor economic news helped spark the short-covering early. Talk that central Illinois corn traded as high as 60 cents over July Thursday helped to support the turn up as well. Weekly export sales came in at just 282,700 tonnes which was well below trade expectations. The Commitments of Traders reports as of May 29th showed Non-Commercial traders were net long 112,631 contracts, a decrease of 41,999 contracts for the week and the aggressive selling trend is seen as a short-term negative force. Non-Commercial and Nonreportable combined traders held a net short of 22,598 contracts. These traders have gone from a net long to a net short position. Commodity Index traders held a net long position of 405,968 contracts, up 4,549.
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