December corn was up 6 1/2 cents late in the overnight session. Outside market forces look positive today, with higher equity and energy markets and a lower US dollar. A larger than expected drop in crop conditions helped support the higher trade and a push to new contract highs overnight. Some rains reported in northern Iowa overnight may have helped limit the advance. The weekly Crop Progress Report showed that 57% of the corn crop was rated good/excellent as of Sunday, compared to 60% last week and 70% a year ago. The 10 year average for this time of year is 59%. Traders expected a 1-2% decline. Iowa fell 4% to 63% vs. 67% last year and Illinois fell a whopping 8% in just one week, to 43% from 64% last year. Keep in mind, the August crop report showed Illinois yield at 170 bushels per acre, up 13 from last year and Iowa yield at 177, up 12 from last year. Traders see only scattered rains across central Illinois in the next few days and little for the next week or more. December corn closed moderately higher on the session yesterday and saw both new contract highs and a new contract high close. A positive tilt to outside markets and talk that weekend rains across the central Midwest were not enough to slow the dryness stress in all areas helped to support. Weekly export inspections, released during the session yesterday, came in at 29.5 million bushels, which was near the low end of expectations. Inspections need to average 70.6 million bushels per week to reach the USDA projection for the year, but there are only a few weeks left. Demand fears are still prevalent, as traders see Black Sea wheat, Ukraine corn, Brazil corn and even US wheat in some areas as cheaper priced than US corn. However, traders also see a potential loss of 500,000-1.0 million in harvested acres in the US and the potential for even further revisions lower in yield ahead as positive supply factors.
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