December corn is trading 15 cents higher near 7:30 CST. After trading near limit down levels yesterday, corn managed to close well off its lows and post a positive move overnight. Technical charts look weak, but the fundamental picture is largely unchanged. This likely brought in speculative buyers overnight. No deliveries have been made in July corn. Total corn open interest was up 17,068 on the lower move yesterday providing ammunition to the bear camp this morning. Dalian November corn is trading down.25%. The corn market made an attempt to pick up the pieces and repair some of the chart damage overnight, however it remains to be seen who exactly holds the upper hand today. The bears point to terrible technical chart damage from yesterday which should force some of the bulls to the sideline. The daily range, violent swings, very large trade volume, and the huge increase in open interest all point to short term top. Rumors were running wild yesterday with thoughts that the EPA would adjust the ethanol mandate lower, this made some investors nervous and they moved to the exits. The USDA made an aggressive decision in cutting the yield to 146 bushels/acre and the market may have been caught off guard. The trade has been pricing in a sub 150 yield for a weeks now, so the fact that the USDA confirmed this, likely caused some steady liquidation in the market, which was accelerated as sell stops were triggered. Despite all of this, the problems we've had since early June are still prevalent today. The weather patterns this last week have been far from perfect for the important corn growing regions at this point in time. While rains have been beneficial to soybeans in the delta and southeast the past 3 days, it will provide no help to the corn crop. The area of real concern now lies in the western Corn Belt for states like Iowa and Nebraska. Temperatures have cooled this week providing relief to corn, however rain has been absent. There is a better chance for showers for parts of the Midwest, east of the Mississippi this weekend and the 6-10 day maps added rain to forecast yesterday but confidence in this 6-10 day forecast remains low, as does the rain over the weekend. The July 8th crop condition report showed 77% of the Illinois and 60% of Indiana were silking, so rain over the weekend will likely not boost production too much for those states. In contrast, Iowa corn silking is 48% and Nebraska is 50%. The 80-90 degree temperatures and lack of rain this past week could add 15-20% to those numbers meaning that if the 6-10 day rainfall developed, only a quarter to a third of the corn in this area would benefit. Further downward revisions to crop conditions for these states and yield stress is likely by next Monday. In the end, nothing has drastically has changed in the corn market and high temperatures in the western Corn Belt for next week could significantly clip Iowa/Nebraska yields. The possibility of better weather remains, but the trade has waited for that since early June and the likelihood that the crop is getting smaller increases with every passing day. The USDA slashed corn demand across the board by taking out 1.05 billion bushels in ethanol, feed demand, and exports. Weekly ethanol production hit the lowest level since September of 2010 and the export market has slowed. However, by just taking the current yield of 146 bushels/acre down to 140 would cut supply by 600 million bushels and drop the stocks/usage from 9.4% to 5.2%, the second lowest since 1950/51. While demand will continue to be stagnant over the next couple of weeks, or months, it is hard to call a top in the market if weather remains warm and dry to finish out the month of July.