December corn was down 4 3/4 cents late in the overnight
trade. Outside markets are mixed with energy weakness offset by
strength in metals. Poor economic news from China helped pressure
the market at times overnight. The market has seen weak a close
for the second day in a row, and there appears to be a general
sense that the weather may shift to stabilize a more temperate
pattern into into early August, which could stabilize yield.
There are also concerns that corn demand could slow due to
increased availability of feedwheat. Traders are concerned that
once the China demand is complete, US export news could slow
significantly, as European and Asian feed makers shift to their
feeding rations to include more wheat. Ethanol production also
appears to be slowing, and the current pace is well below what is
needed to reach the current USDA projection for the year. In
addition, poultry numbers are on the decline in the US. The
weather models overnight seemed to be in better agreement that
the heat dome will be shifting over to the Rockies into late
July/early August and that there will be a moderate trough over
the eastern third of the country into August 1st. The forecast is
still calling for rain in the northern and eastern parts of the
Midwest into the weekend, and the 6-10 day is still showing above
normal temperatures and below normal precipitation for the
central part of the Midwest with above normal rains for the
northern parts of the Corn Belt. In other words, the market faces
more normal weather into early August after a bit more heat and
dryness for southern and western sections of the Corn Belt next
week. Funds were noted as fairly aggressive sellers on the
session yesterday, and the market closed nearly 10 cents lower on
the session and nearly 20 cents off of the early highs. A lack of
buying interest after the higher opening sparked a long
liquidation sell-offand a push to lower on the day shortly after
the opening. Ideas that buyers did not want to get caught buying
the market on the hottest day of the year "if" weather were to
turn more normal into next week and next month helped to spark
some of the selling. Traders see the current heat as a supportive
force, but there are some concerns that the recent $1.25 rally
might have slowed demand. Talk that feedwheat exports will eat
into the corn export outlook helped to pressure. The USDA
announced that exporters switched 138,000 tonnes of US corn to
South Korea from an unknown destination. Ethanol production for
the week ending July 15th averaged 873,000 barrels per day. This
was up 0.11% from the previous week and up 4.43% from last year.
Corn used in last week's production is estimated at 91.665
million bushels. Stocks were 19.145 million barrels, which was up
1.97% on the week. Most traders expect weekly export sales this
morning to come in above 1 million tonnes but well below last
week's total of 1.68 million, and there is talk in the cash
markets that next week's export sales report will show
significant slowing.