March corn was trading 1 1/2 cents higher late in the overnight session and traded as low as 598 1/4 before outside forces turned positive. A weaker US dollar, firm metal and energy markets and another strong rally for US stocks overnight lent support. There were no corn deliveries for the third day of the delivery period. The market looks to receive some support from outside market forces, but traders remain concerned with a weak export outlook for the US and continued upward revisions for production. In addition, South America weather remains favorable. The Argentina exchange pegged corn plantings at 65% complete. A Brazil trade group pegged the corn crop this year at 62 million tonnes, compared with the USDA estimate at 61 million. China's National Bureau of Statistics reported corn production at a whopping 191.75 million tonnes this year, which is up sharply from the current USDA estimate of 184.5 million tonnes and up from 177.25 million last year and 163.9 million two years ago. Brazil exported just 908,800 tonnes of corn in November, up from 1.52 million in October and 1.83 million tonnes last year. March corn closed moderately lower on the session yesterday with an inside day, while new crop December managed to close slightly higher, also with an inside trading session. The muted response from outside market forces Wednesday was followed by a negative response to mixed news yesterday, as speculative buyers have been timid this week while a profit-taking trend from longs emerged into the mid-session to pressure corn. Talk that US corn is just overpriced compared with other countries and compared with wheat helped to leave a negative demand tilt to the market. Traders see Mexico buying soft red wheat from the US, Spain buying feedwheat from Brazil and Vietnam buying Australia feedwheat as examples of lost business for US corn exporters, and Ukraine corn is still priced under US. Weekly export sales for corn, released before the open yesterday, came in at the low end of trade expectations at 280,600 metric tonnes for the current marketing year and 71,600 for the next marketing year for a total of 352,200. Sales are running 3% behind last year. Cumulative corn sales stand at 54.5% of the USDA forecast for 2011/12 (current) marketing year versus a 5 year average of 44.4%. Sales of 459,000 metric tonnes are needed each week to reach the USDA forecast.
Continue Reading Below