December corn was 7 3/4 cents lower overnight. The dollar was steady to firm and crude oil made new all-time highs.

Corn opened lower yesterday and rallied throughout the day. This was capped off by a stunning surge that pushed the July and December contracts to touch limit up just prior to the close. Traders said that fund buying late in the day and a lack of sellers were the main features. Traders also indicate that forecasts of hot weather after this weekend with the possibility of dryness starting later next week supported the market throughout the day. Forecasts this morning remain hot, but some forecasters are calling for ample rains in the north central and eastern portions of the Corn Belt. Many traders are concerned that the corn crop is especially vulnerable to heat stress this year. The Indian government said today that it is banning corn exports until October 15th. This follows reports that the premier of China told his cabinet yesterday that grain stocks in that country are likely to remain very tight through 2008/09. Some traders have interpreted this to mean that Chinese corn exports are likely to remain very light into next year. China has essentially withdrawn from exporting corn in 2008 with the main exception being sales to Taiwan and North Korea that are interpreted as being for political and humanitarian purposes. Deliveries against the July contract today were 559 contracts. Funds were noted buyers of near 10,000 contracts yesterday.

A mixture of cooler than normal temperatures and rain is expected through Friday in most growing areas, with hotter temperatures expected to move into the Corn Belt starting on Saturday. Warmer temperatures should be accompanied by shifting rain patterns into Wednesday of next week, after which the hottest temperatures are expected to lock in. Above normal temperatures are expected to remain in all major growing areas through at least the 11th and probably through the 15th, with hottest and driest pattern likely in the western Corn Belt. A private consortium in Israel is tendering for up to 16,000 tonnes of corn and 28,000 tonnes of corn products and soybean meal. Kenya is in for 270,000 tonnes of corn in July. No other major tenders are scheduled.

Weekly export sales for corn, released before the open, came in at 325,900 metric tonnes for the current marketing year and 302,500 for the next marketing year for a total of 628,400.