July corn was trading near 1 1/2 cents higher and December down 2 cents into 7:00 AM central time. Outside market forces look mixed with a firm tone to the stock market and a slightly weaker dollar but also weakness in metal and energy markets. China futures were up slightly. The key numbers for the report include the ending stocks which were 851 million bushels last month for the 2011/12 season and 1.881 billion for the 2012/13 season. The market is likely to turn up on any number under 825 for 2011/12 and under 1.7 billion for 2012/13 season. The market is likely to turn down on any number over 855 for 2011/12 and over 1.8 billion for 2012/13 season. The outlook for more rain into late June on the extended forecast models into the pollination period for many fields has helped to pressure the market off of Friday's highs. The weekly crop updates help show the importance of the rains yesterday and for rain for the rest of this month. The weekly updated showed that just 66% of the crop is rated good/excellent compared to 72% last week and 69% last year. The 10 year average for this time of year is 68%. Ratings in Illinois and Indiana were down sharply. Illinois topsoil moisture was 78% short to very short and Missouri was 87% short to very short. Indiana is 74% short to very short and even Iowa was 66%. Cash basis levels remain very strong with Decatur at 67 cents premium July and Chicago bid at 68 cents premium. July corn closed moderately lower on the session yesterday with December corn down 10 cents as fund traders were aggressive sellers. Central and southern sections of Illinois look to receive more rain than traders had anticipated but some of the northern parts of the state may be missed. The weather outlook into late June is not as threatening as Friday's outlook. While there is not much rain for the next 10 days, the 11-15 day models have turned wetter. Confidence is low for this far out. Dryness concerns persist for the northern China plains as well and this helped to provide some underlying support but even there, some of the longer-term models show rain chances for part of the dry areas. Weekly export inspections came in at 17.029 million bushels which was about 10 million below trade expectations. Inspections need to average 37.5 million bushels per week to reach the USDA projection for the season.
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