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

More fund selling in corn yesterday limited gains and the December contract remained well within Wednesday's trading range. Overnight trade has in turn remained within yesterday's trading range with prices finishing near the lows in the overnight session. Trade sentiment has favored a short covering rally this week and fund selling has slowed, but floor traders point out that fund selling did not stop altogether yesterday much less reverse. Weather forecasts are again calling for warm and moist conditions over the short term with increasing heat into August. China has sold 300,000 tonnes of corn from reserves this week in what is viewed as a rotation of stocks in advance of harvest. Local sources say these sales are expected to continue. Weekly export sales for corn came in at 323,500 metric tonnes for old crop yesterday and 499,600 for new crop for a total of 823,100 tonnes sold. This was near the high end of trade expectations. Total sales to date stand at 98.1% of the USDA forecast versus a 5 year average of 95.2%. Cash markets in the US remain quiet with mostly steady basis levels yesterday. Traders indicate that weather is near ideal for the pollination of the crop and there is still a fear that restrictions on index fund traders proposed in a bill which has been approved by the House Agriculture Committee could cause more fund selling ahead. The bill may be called for a vote next week and will call for the CFTC to set position limits for index funds and swap dealers.

The past 24-36 hours have seen light to moderate rains across much of Nebraska with moderate to heavy amounts in western and central Iowa, northern Missouri and southern Illinois. Forecasts generally call for above normal temperature for the next week to two weeks with the possibility of well above normal temperatures into August. Forecasters disagree as to whether the hottest temperatures will remain west of the Mississippi or gravitate to the central Midwest over the long ter. In the short term, high humidity should blanket most major growing areas, moderating any negative effects from the increased heat. No new tenders are scheduled in corn.