March corn was trading near unchanged late in the overnight session. Outside market forces look slightly negative as the US dollar was seeing higher trade late this morning and energy and metal markets were lower. There were still no corn deliveries against the December contract. The market saw bullish technical action yesterday with a new low for the move and a higher close with a relatively wide range. A bullish tone for expectations for the supply/demand report for Friday and ideas that the market is oversold helped to support the bounce. There is no production survey for December and focus of attention for the USDA report will be US demand and foreign production. Traders see ending stocks for the 2011/12 season near 830 million bushels as compared with 843 million last month and 866 million in October. While there is a stocks report in January which will give traders a better clue on domestic demand, traders see a revision higher in feed and ethanol usage as a reason for the stocks decline. The market faces a significant jump of near 6-8 million tonnes in world production if recent China and Brazil production ideas are revised for the report. Traders are looking for a slight increase in world ending stocks from the 121.57 million tonnes last month but without corresponding increase in demand, ending stocks could jump by several million tonnes. March corn closed moderately higher on the session yesterday and at the high end of a large range for the day. Fund traders shifted from sellers to buyers into the mid-session with "less" negative news out of Europe and a bit more support coming from higher trade in energy. Increasing feedgrain supply on the world market to compete with US exporters plus continued fund trader selling helped drive the market sharply lower early in the session. Ideas that the 36 cent break off of Wednesday's highs plus some stability in world financial markets and a bounce in soybeans helped to support the solid recovery. Higher wheat prices added to the positive tone. The early selling pushed the market down to the lowest level since March 17th. News of a record Australia wheat production helped to pressure the market early as recent rains have downgraded a higher than normal percentage of the wheat to feed quality. Argentina is expected to soon approve the export of an additional 1-2 million tonnes of corn from the 2010/11 season. Talk of a dry trend for the 2011/12 crop weather outlook over the next week to ten days helped to provide some support for the market to trade higher on the day and fund buyers stayed active into the close.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.