December corn was up 9 3/4 cents late in the overnight session. Outside market forces look very strong this morning, as EU leaders have reached an agreement to avoid a steep contraction of the economy, and money appears to be flowing away from the US dollar and into riskier assets such as commodities and equities. The big question this morning is whether the EU debt crisis plan will be enough to see traders return to grain and commodity markets as a longer-term buy and hold strategy. Since early April, December corn has spent only a handful of trading sessions below the 630 level, which was tested yesterday. China has emerged as an active buyer on breaks below this level. If the financial markets settle down, trade focus is likely to shift to the upcoming Crop Production and Supply/Demand reports from the USDA. There is a mix of ideas, but more and more traders see a smaller yield than last month's estimate of 148.1 bushels per acre. However, traders also see stiffer competition on the export front, which may be offset by higher than expected demand from China. Private exporters reported to the USDA a sale of 100,000 tonnes of US corn for an unknown destination yesterday. Japan bought a cargo of Ukrainian corn for the first time in over one year, and traders believe that if the quality is good, they may seek more of their needs from Ukraine this season. Ukraine had a large crop this year and could export nearly 12 million tonnes this season, compared with 4.95 million last year. Good weather for the planting season in South America was also seen as a short-term negative force, but there are also weather watchers who see La Nina dry-weather trends for South America in the months ahead. The short-term forecast has shifted to a drier trend for the next week or so. Aggressive selling occurred for much of the session yesterday, as some concerns over the Euro debt crisis started the trend, but it continued for energy and agriculture markets even when equity markets traded sharply higher. Rumors that a large brokerage firm may need to exit long positions in grains, livestock and energy markets it needs to be sold added to the selling pressures. December corn closed at a 4-session low. Ethanol production for the week ending October 21st averaged 909,000 barrels per day. This was up 0.11% from last week and up 3.3% from last year. Total ethanol production for the week was 6.363 million barrels, which was the highest weekly total since June 3. Corn used in last week's production was estimated at 96.8 million bushels. Corn use needs to average 96.3 million bushels per week to meet this crop year's USDA forecast. Stocks totaled 17.29 million barrels, up 1.4% from last week and up 6% from last year. Taiwan is tendering to buy 45,000-60,000 tonnes of corn.
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