December corn was trading 1 1/2 cents lower near 7:30 am CST and Chinese markets were closed for the "Golden Week" Holiday. European markets were higher overnight and the Euro rose against the US Dollar after the ECB reassured investors around the world that they were ready to buy bonds of distressed member countries. The BOJ announced no policy or stimulus action in their meeting, which was expected by traders. Most commodity markets are weaker to start the day as traders await Monthly Payroll data this morning.

The corn market is trading slightly lower in early trade in what was a light volume and steady overnight session. December corn traded mixed yesterday and settled marginally lower. Early support was linked to an explosive soybean market and a sharply lower US Dollar but gains eroded into the close as the wheat market came under pressure and as traders took profits. Yesterday's volume was recorded at 155,234 contracts and open interest declined by 3,489. The data suggests a neutral bias to the market and profit taking.

Bulls believe the USDA may take down the average US corn yield and production next week while bears point to a slow export pace and cheaper South American corn. Total net weekly export sales for corn, came in at 326,900 tonnes which was slightly above market expectations. As of September 27th, cumulative corn sales stand at 33% of the USDA forecast for current marketing year vs. a 5 year average of 37%. This year's slowing export pace continues to be a drag on prices in the short term and it was reported overnight that South Korea's largest feedmaker broke away from its traditional purchasing patterns of buying US corn and instead bought 10,000 tonnes from Russia. Many traders believe this is one of the first Russian sales of corn to Korea. This trade is highly symbolic of how world buyers are reacting to rising corn prices in the US and it could limit price gains in the long term.

The US Grains Council reported that the 2012 China corn crop may produce 5-6 million tonnes more than in 2011. The USDA currently has the crop at 200 million tonnes while China's official estimate is 197 million tonnes. USGC officials noted that while production would be sufficient to meet domestic demand, the county could import supplies to build its reserve stockpiles.

Corn basis was steady to firm across the US Corn Belt yesterday. Decatur, IL basis bids were unchanged at 15 cents over the December contract and bids in Council Bluffs, IA rose by 2 cents per bushel to 10 cents over the December contract. Farmers continue to hold off on new sales as harvest wraps up in certain regions of the US.

 

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