March corn was down 3 cents late in the overnight session. Outside market forces look bearish today as traders seem to be moving out of risk with gold and energy markets down overnight and further weakness in global equity markets. The dollar shifted from lower to higher this morning, which has added to the negative tone. There were still no deliveries against the December contract this morning and none for the month. A dry forecast is a concern for the market, but a negative tilt to outside markets keeps the threat of long liquidation selling intact for the short term. This has helped hold the market in a choppy trading range near 590-600 March. March corn saw a late bounce yeaterday, which allowed it to recover from earlier losses and close near unchanged. A risk-off mentality in many commodity markets contributed to fund selling in corn and fund buying (short-covering) in wheat. The surge higher in energy would normally be considered a supportive force, but not on a day when gold was down sharply. Continued talk of a drying trend for Argentina for the next week and a supportive tilt to outside market forces helped to support the market early in the session. However, the market gave back all of the gains for the day as the US dollar strengthened and gold pushed from higher to lower on the session. Energy markets were strong due to increased political tensions in Iran, but this did not seem to support corn and other commodity markets. Many traders see current crop conditions for corn in Argentina as favorable, but a dry outlook into the middle of next week plus some talk of higher temperatures has lent support. At present, traders see corn under some stress if the 10 day forecast is correct. The 11-15 day forecast calls for rain, which will be necessary to avoid potential losses and to reduce stress for pollination. Trade focus is on the weather in Argentina and southern Brazil and on the possibility of further production and yield revisions for the critical January 12th USDA reports.
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