Corn                                                 Estimated Fund Position
Short Term: Up                              Net Long Futures and Options: 98539
Long Term: Up                               Change: +18000
Overnight Trade: Z +6 @7:15 AM
Opening Calls: 5-10 Higher

Crop condition ratings declined more than expected to 48% Good – Excellent. The only year with lower condition ratings was 1988, which bottomed out at 14% Good to Excellent next week. If it would rain the perhaps condition ratings would stabilize, but at the moment significant rain does not look likely. The December corn reached $6.72 overnight so the test of the contract highs has begun. A close over $6.75 would suggest a move to the $7.50 area.

Wheat                                                 Estimated Fund Position
Short Term: Up                                  Net Long Futures and Options: -10111
Long Term:Up                                    Change: +3500
Overnight Trade: Chicago: Z +1 KC: Z Unch @7:15 AM
Opening Calls: Steady - Higher

The wheat made another new high for the move overnight. The December KW is testing last fall’s highs, which are just above $8.00. The corn and soybeans are dragging the wheat market higher for the most part and I am sure that many traders are thinking about acreage losses this fall due to a combination of dry weather and the need for corn and soybeans to hold on to acreage next spring. Wheat should be the short leg of spreads today, but gains in the corn will keep support under the wheat.

Soybeans                                             Estimated Fund Position
Short Term: Up                                    Net Long Futures and Options: 204820
Long Term:Up                                      Change: +5000
Overnight Trade: X +11 @7:15 AM
Opening Calls: 10-20 Higher

Soybean conditions also declined 8 points falling to 45% Good to Excellent. There is no way USDA can justify using a record yield with below average condition ratings, so plan on a production cut in the July supply and demand report. November beans have moved through $14.50 and are making new contract highs. The next major objective is the $15.00 level.