July corn was up 2 cents late in the overnight session but traded as much as 13 cents lower. Outside market forces look positive today with a weaker US dollar and a firm tone to metal and energy markets. Traders see a 10 day period ahead of warmer and drier weather as a negative force as planting progress should get very active in Ohio and parts of Indiana and the heat will be beneficial for the early growing season. However, traders see a shift to a warmer and drier pattern as a potential bullish force as yield potential could be compromised if the pattern remains hot and dry for the second half of June. Traders see planting progress near 86-89% complete for tonight's weekly progress update as compared with 96% last year and 91% for the 10-year average. Crop conditions are expected to be well down from 76% rated good to excellent near the end of May last year. July corn closed sharply higher on the session on Friday and new crop December corn experienced a life-of-contract high close as short-covering and some new buying into the long weekend helped support. Commercial buying was noted in July corn as traders indicated that finding corn for delivery in July or August is very difficult and warehouse receipt demand is picking up. The market saw some early weakness led by talk of better planting weather for this week. Profit-taking ahead of the 3-day weekend and ideas that warmer weather will help the crop which has already emerged see some improving condition added to the negative tone early. A positive tone to outside markets and ideas that poor weather this year in the EU could spark lower yields and increased import demand for feedgrains added to the buying. While wheat prices were choppy and meal closed moderately lower, traders were impressed with the strong demand for corn late in the day. Poor yields for this year in Europe or the US may be considered bullish with low global feedgrain supply and uncertainties on China supply and demand. A sharp rally in hog prices in China over the past three weeks may be a sign of better feedgrain demand ahead. The Commitments of Traders reports as of May 24th showed Non-Commercial traders were net long 351,317 contracts, an increase of 31,117 contracts for the week. Non-Commercial and Nonreportable combined traders held a net long position of 290,333 contracts, up 31,903 and Commodity Index traders held a net long position of 378,000 contracts, down 2,115 contracts for the week.
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