December corn is trading 14 cents lower near 7:30 am CST and there were 18 September corn deliveries overnight bringing the month-to-date total to 18 contracts. Dalian corn traded 0.7% lower overnight. Most commodity markets were under pressure overnight following the higher trade on Friday. Tensions in the Middle East along with a more cautious mood by investors weighed on markets. The Euro fell against the US Dollar which added to the negative tilt to commodities. Corn was also pressure from a sharply lower soybean market and a weaker trade in crude oil.

December corn fell overnight after the soybean market traded sharply lower as harvest moves steadily across the Midwest. Open interest grew by 5,129 contracts on last Friday's higher trade with volume recorded at just over 180,000 contracts. The average volume, increases in Open interest, and higher trade suggest new money flowing into the corn complex and perhaps an increase in bullish sentiment. Open interest remains well below year ago levels however, the easy money message sent by the Federal Reserve last week could clear the way for funds to dump new money into commodity markets, such as corn.

The Commitments of Traders reports as of September 11th showed Non-Commercial traders were net long 336,842 contracts, a decrease of 30,272 contracts for the week and the selling trend is seen as a short-term negative force. Trend-Following Funds (Non-Commercials net of index funds) were net long 239,873 contracts which was down 31,770 from the week prior. Non-Commercial and Non-Reportable combined traders held a net long of 249,154 contracts, down 32,654 and is well under the record long position ever held at 366,547. The lower price trend earlier last week suggests many traders holding long positions headed to the side lines and took profits ahead of the USDA report, which this data confirms.

Harvest progressed nicely over the weekend with most showers confined to the southern Midwest and only scattered showers are expected to show up early this week in the central Midwest and Delta. Only minor harvest disruptions and damage are expected. Very cool weather is expected to show up in Minnesota and Wisconsin between Tuesday and Wednesday but the threat of frost is low. South American weather has turned a bit more favorable from Friday with weekend rain seen in areas of Argentina, and the storms managed to hit areas of Mato Grosso and Rio Grande do Sul. Rainfall has been above average for Argentina and their main grain exchange expects a record 2012/13 harvest at 25-26 million tonnes while the USDA sits at 28 million tonnes. The best showers were seen in Southern Brazil but central and northwestern Brazil look slightly wetter later this week. This should benefit first crop corn planting. More rainfall is needed to benefit early row crop planting.

Cash bids for corn continue to weaken as physical grain movement becomes more liquid across the Midwest. New farmer sales were slow as many feel prices will move higher later this winter. River bids for corn were steady to weaker as barge freight firmed. Decatur, IL corn bids held steady at 28 cents over the December contract while Davenport, IA river bids dropped 2 cents to 28 cents under. Council Bluffs, IA corn bids rose 2 cents to 8 cents under the December contract. Traders expect harvest to be near 20-25% complete in tonight's update.

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