December corn was down 7 3/4 cents late in the overnight trade. Outside markets are mixed with weakness in equity markets offset by a weaker US dollar and higher gold and silver markets. While hot weather and especially record or near record high overnight low temperatures may have done permanent yield damage, traders see August weather as another good indication of just how bad yields might be. Good rains for parts of Iowa, Illinois, Indiana and Ohio over the weekend with more chances of rain early and late this week are seen as negative factors as the rain is expected to ease crop stress and cooler weather might aid late pollinating corn. As a result, December corn closed just 1/2 cent higher on the week last week with volatile trade. The outlook for early August weather is seen as uncertain but the Midwest is expected to heat up again this week with mid-90's as highs. December corn saw some active buying late in the session on Friday as traders seemed un-interested in going home short on the weekend despite a more neutral weather outlook into early August. Talk that key analysts were lowering their yield forecasts after severe heat last week helped support the bounce after lower closes for the Wednesday and Thursday. Parts of the southern and western Corn Belt may miss out on rains this week and there is concern for increased stress. Traders see crop conditions declining by 2-3% for this afternoon's weekly update. Cash basis levels have weakened from extremely high levels of earlier this month. Weakness in wheat was seen as a limiting factor as traders remain concerned over less feed and export demand for corn due to availability of feedwheat in the US and from the Black Sea region. Ideas that the heat last week clipped yield potential helped to provide underlying support. Corn exports from Brazil may not reach expectations due to the poor winter crop and a strong Brazil currency. Official estimates showed Brazil exports were expected to reach 8 million tonnes this year from 10.8 million last year as cold weather hurt the late crop. The USDA cattle on feed report showed more cattle than expected moving onto feedlots in June which is seen as somewhat positive to corn. The Commitments of Traders reports as of July 19th showed Non-Commercial traders were net long 276,173 contracts, an increase of 26,592 contracts for the week and the buying trend is seen as a short-term positive force. Commodity Index traders held a net long position of 368,278 contracts, down 5,498.
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