December corn was 21 1/4 cents lower overnight. The dollar was somewhat higher overnight and crude oil was lower.

Corn put in another hard down day yesterday and the overnight session was simply more of the same with prices falling sharply and finishing at their lows overnight. Weather remains favorable through the end of the month which covers much of the pollination period for corn. Fund selling/liquidation is now the most significant factor in the corn market in the opinion of many traders, especially in light of the fact that the net long position by trend-following and index funds is still larger than in any other grain market. Cash markets have remained quiet and mostly steady into this week with little sign of farmer selling on the break so far. Cash market sources are concerned that farmers are no longer expecting a recovery bounce and may start to accelerate selling on further weakness. The EPA administrator said yesterday that they will not be ruling tomorrow on the Texas request for a partial waiver of its ethanol mandate as was expected. Expectations have shifted as the market has declined with early ideas that the EPA would grant the partial waiver switching to current sentiment that they will not.

Weather overnight was about as expected. Most of the corn belt has been dry over the past 24-36 hours with the exception of Missouri. Over the next 7 days, above normal moisture is expected in a wide band that runs from central South Dakota through NE Nebraska, the southeastern half of Missouri, central and southern Illinois and southern Indiana and Ohio. Areas to the northeast and southwest of this band should be dry. Above normal temperatures are expected across most major growing areas starting at the end of July and running for at least a week into August. This should be past the pollination period for most of the corn crop, but a time of vulnerability for soybeans. No new tenders are scheduled in corn.