December corn was up 8 3/4 cents late in the overnight session. Outside market forces look more positive today with strong energy markets and a firm tone to the stock market. In addition, weakness in the US dollar is also seen as a supportive force. After the steep break off of the late August highs, traders are monitoring demand news closely to see if the break was enough to attract new demand. Margins for hog and cattle producers appear profitable at current corn prices, and ethanol plant margins are also favorable. Traders also noted the smaller production estimate from China yesterday, with talk that the current price for corn in the US may also attract good margins for feeding operations in China, which could attract some increased export demand. As a result, traders are also watching corn prices in China to gauge the potential for a seasonal drop into the new crop harvest. December corn closed moderately lower on the session yesterday, but choppy trade in financial markets kept corn inside of Monday's range. The market saw active selling pressures early in the session, with further concerns for debt issues in Europe helping to spark long liquidation selling in corn and a wide range of other commodity markets. Even a mid-session jump to higher on the day for stock index futures failed to spark much in the way of a bounce in the corn market. Nearly ideal weather for harvest and continued reports of better than expected yields from producers have helped to pressure. As of Sunday, the harvest is 21% complete. The US Grains Council believes that China corn production this year will come in near 167 million tonnes and that China will import 5-10 million tonnes. This production estimate is 11 million tonnes below the USDA estimate for corn production and 15.5 million tonnes below China consumption estimates from the USDA. Traders will keep an eye on the China production forecast for the world supply/demand report next week.
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