December corn was up 1 3/4 cents late in the overnight session. Outside markets look somewhat unsettled today as the US dollar shifted from lower to higher late in the overnight session and the US stock market gave back all of the strong overnight gains to push lower. Traders will be monitoring the USDA reports this morning for direction, but further weakness in the US stock market is a concern. While some traders see the USDA counting stalks and using average ear weights to determine yield, others see serious pollination issues and expect the USDA to pick up on the poor yield outlook. The USDA pegged yield at 158.7 bu/acre last month, and most estimates are near 155 for this report. The USDA pegged yield at 165 in August of last year only to see actual yields drop to 152.8. The recent slower demand tone has traders looking for an adjustment higher of about 40 million bushels in beginning stocks. Demand revisions lower are expected to partially offset the production declines, and traders see ending stocks for the 2011/12 season down about 120 million bushels from just 870 million projected last month. Production is expected to be revised down nearly 400 million bushels from 13.470 billion bushels in July. Many traders see a further adjustment lower in September as more and more of the pollination and "tip-back" issues are picked up. Traders see world corn ending stocks falling another 1.5 million tonnes or so from 115.66 million tonnes last month, which was already a 5-year low. December corn closed unchanged on the session yesterday and near the lows of the day. A collapse in the US stock market over European bank fears and concerns that the stock market break could spread to slow economic growth helped spark a setback from the highs. Traders see good weather for the Midwest for the next week or so but a hotter and drier trend in the extended models for the western Corn Belt helped to support. South Korea bought 55,000 tonnes of US corn. Ethanol production for the week ending August 5th averaged 908,000 barrels per day, up 3.42% vs. last week and up 4.85% vs. last year. Production for the week was the highest since June 3rd, and total implied demand for the week when including production, the lower stocks and higher exports reached the highest level for the week since the weekly reports began in June of 2010. Open interest for the December $8 calls (the record high for nearby corn is 799 3/4) hit a record high of 82,502 contracts.