December corn was down 5 1/2 cents as of 7:30 CST following yesterday's trade that saw brief round of profit taking. December corn traded nearly a 20 cent range overnight but sellers soon took over. Dalian corn traded.82% lower overnight. Outside markets are not helping grains this morning with stocks trending lower and the US Dollar sharply higher after testimony by Federal Reserve Chairman Ben Bernanke offered no evidence of further monetary easing yesterday. Corn bulls took a breather overnight after December corn was unable to test yesterday's new high at $7.89. After rallying over 40% in the last 4 weeks, the corn market took profits as the new crop corn contract nears $8.00. Corn open interest grew by double digits for the second day in the row, as 11,965 new positions were opened. The trade yesterday saw both gains and losses so it's difficult to imply if new longs came into the market or if speculators feel we have reached a top for now. The bear camp feels that we are beginning to ration demand as rumors that China canceled US corn shipments circulated around the market yesterday. There has been no official confirmation, however. Bears also feel that a 140 bushels/acre yield might be priced into the market near $8.00. West central Nebraska had a round of showers pass through yesterday afternoon that dropped anywhere from .25-.75 inches of rain. The coverage was scattered and will briefly relieve stress on some of the corn. A large storm system is also moving through South Dakota this morning providing farmers with a steady dose of precipitation. This should be beneficial to corn as the state pollination rate is 36%. The central third of the Midwest should remain dry to finish out the week and temperatures soared into the 100's yesterday. The 10 day Kansas City forecast calls for 95-105 degree temperatures and Missouri, Iowa, and Illinois are seeing 70-80 degree temperatures as lows this morning. Many areas of Iowa, Nebraska and South Dakota are expected to be back into the 100's into next week. Topsoil conditions across the Midwest remain some of the worst ever recorded with Nebraska at Iowa at 92% short-very short. The drought in Nebraska has gotten so bad since the end of June that state officials announced this week that irrigation systems will need to be shut down for specific areas of the state until rivers, streams, and lakes increase water levels. The market remains fully aware of just how poor demand is, but it doesn't seem to matter at the moment. The market is uncertain as to how low the corn yield has already dropped from the latest USDA estimate of 146 bushels/acre. Many traders are down to the 139 area.
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