December corn is trading 15 cents higher near 7:30 CST and came to within 1 1/2 cents of Wednesday's highs overnight. Outside market forces look positive today and traders see very hot and mostly dry weather for Iowa in the next ten days as a reason to be concerned for a potential yield disaster this season. There are still no deliveries made to July corn. China futures were up 0.5% overnight. For the past few sessions, traders believed that a slight break in the dry weather might allow for a yield close to the USDA estimate this week but a turn in the forecast for next week to see temperatures back near 100 and mostly dry weather for Iowa has more and more traders expecting yield to fall well under 140. In the 6 previous weather seasons of the past 41 years when crops were hit with drought or heat, yield fell 11.6% to 28.7% below the 10-year trend. The USDA forecast is down just 8.2% below the 10-year trend yield. Field reports in the east are still coming in with horror stories for yield and Iowa conditions are collapsing. Reports in central and especially southern Illinois of insurance adjusters zeroing out entire fields has traders expecting millions of acres of abandonment. The USDA world report this week showed world course grain stocks/usage near the historic lows of 1973 and an adjustment lower in US yield could easily drive supply tightness readings to record lows. There is plenty of discussion about the EPA adjusting the mandate lower to ease supply concerns but in reality, this process could take time. The Texas governor in 2008 ask for a waiver which was not granted even though corn pushed to $8. Even if states ask for waivers, there will likely be a 90-day discussion period before anything is granted. In addition, while ethanol margins are weak, it will not take much of a bounce in gasoline (and ethanol) prices to see plants near break-even. December corn closed sharply higher on the session yesterday as fund and speculative buying emerged despite the bearish technical action from Wednesday. Weather fears persist with a special focus on late pollinating corn in Iowa. Parts of Iowa may get up to 1/2 inch of rain into early next week but forecast models are mixed with the idea. Temperatures look to surge into the 100's and with extremely dry topsoil (88% of the state showing short to very short topsoil conditions as compared with 15% as the 5-year average) traders see very poor weather for pollination which could lead to permanent yield loss. Rain is expected for the eastern Corn Belt for the second half of next week but traders see rains in this region as beneficial but not so much for corn yield which was already permanently damaged. Weekly export sales for corn came in better than expected at 664,800 tonnes. Ideas that crop conditions will continue to deteriorate until meaningful rainfall hits the Midwest has helped support. December corn has rallied as much as 61 1/4 cents off of Wednesday's lows.