Pre-Opening Corn Market Report for 9/6/2011

December corn was down 6 cents late in the overnight session. Outside market forces look negative today, as euro zone debt issues persist and the US dollar is at its highest level since early August. Weakness in energy and equity markets overnight add to the negative tone. There have still been no deliveries for September corn. Outside market forces had the grain markets under pressure overnight, and the weekend weather was a little better for crops than traders had expected. However, the weather is less and less of a factor for yield, and a drier trend this week is seen as a something that would boost harvest progress. South Korea bought 220,000 tonnes of US corn over the long weekend. Israel is tendering to buy 58,000 tonnes of optional-origin corn. China feed industry officials believe the country will consume nearly 17 million tonnes of feedwheat this year, compared with 12.5 million tonnes last year. Feed demand in China is strong, with record high profit margins for hog producers and an expanding middle class. The Commitments of Traders reports as of August 30th showed non-commercial traders were net long 353,323 contracts, an increase of 35,908 contracts for the week. The buying trend is seen as a short-term positive force. Commodity index traders held a net long position of 364,871 contracts, up 13,653 contracts for the week. The market shook off bearish outside market forces and a long liquidation trend from Thursday to see solid gains on the session Friday, as supply fears appeared to be offsetting slower demand concerns. Yield concerns emerged again, and the failure to take out Thursday's lows early sparked another round of active buying and sharply higher trade into the mid-session. A low yield forecast from a private firm supported the rally. Traders are looking for another drop in crop conditions for the weekly update this afternoon. The surge higher to over 100 degrees for a wide area of central Illinois for two days has likely accelerated the surge toward maturity for crops in this region, and the little rain that did hit the region on the weekend may not be much help to yield. Some areas of the far southeastern Midwest (southern Ohio) picked up higher amounts due to tropical storm leakage. The shorter than normal grain filling period may cause lighter ear weights and lower yields in the end, and the 2-day heat blast was enough to support the market on Friday. Cash markets are under pressure into the early harvest period.

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.

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