March corn was up 7 cents late in the overnight session. Outside forces look supportive with a weak US dollar and higher metal markets. The weak US dollar and the outlook for tightening corn supply ahead helped support strong gains overnight. Talk that China will soon begin to restock reserves through purchases from producers helped to support the market as well. The market saw an impressive rally late in the session on Friday to take March futures above Thursday's highs into the close. March corn gained 53 3/4 cents on the week and opened on the lows of the week Monday morning and closed at the highs of the week on Friday. A lack of aggressive selling pressures despite weakness in the wide range of other commodity markets may have helped spark short covering and new buying late in the day as the US stock market was strong and energy markets traded higher. News of continued tightening in China and ideas that the market is overbought after the strong rally had helped to trigger light selling pressure earlier in the session. Uncertainty on the crop situation in Argentina with rains in the forecast for the long weekend and early this week was also seen as a potential bearish force and contributed to the long liquidation selling. Argentina received good rains on the week to ease crop stress, but parts of Cordoba missed out and traders see a hot and dry trend developing this week after some scattered rains on Wednesday. The Buenos Aires Grains Exchange left their corn production estimate for Argentina unchanged last week at 20.35 million tonnes. This estimate compares with the USDA estimate at 23.5 million tonnes. There are some traders looking for production under 20 million tonnes. Argentine farmers will halt export movement of all grains and oilseeds for one week beginning yesterday to protest government taxes for corn and wheat. The Commitments of Traders reports as of January 11th showed non-commercial traders were net long 392,399 contracts, a decrease of 7,445 contracts for the week. The selling trend is seen as a short-term negative force. Commodity index traders held a net long position of 426,118 contracts. This represents a decrease of 31,353 contracts for the week and is seen as part of the index fund rebalancing effort.
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