March corn was trading 3 3/4 cents higher late in the overnight session. Outside market forces look mostly positive today with another jump in equity markets and a weaker tone to the US dollar. There were still no corn deliveries against the December contract. Outside market forces are positive and this may provide some early support but the constant struggle for US corn exporters in recent weeks plus news of hefty rain totals on the Australia wheat crop may be seen as negative. Japan, South Korea and China may all be replacing corn needs with Australia feedwheat this year. Just a month ago, traders had believed that better demand from Mexico and China would offset slower exports to other countries but more and more traders now see the possibility of lower export projections ahead. March corn closed 6 1/4 cents lower on the session Friday which left the market up just 5 1/4 cents for the week. The market saw some early support from a positive tilt to outside market forces but plenty of negative news for corn exporters plus a big jump in the China corn production forecast helped spark a selling trend and lower prices into the mid-session. The selling occurred despite a turn sharply higher in wheat as support from outside markets faded and focus shifted to the short-term demand issues. China's National Bureau of Statistics reported corn production at as whopping 191.75 million tonnes this year which is up sharply from the current USDA estimate of 184.5 million tonnes and up from 177.25 million last year and 163.9 million two years ago. Traders see Mexico buying soft red wheat from the US, Spain buying feedwheat from Brazil and Vietnam buying Australia feedwheat as examples of lost business for US corn exporters. The shift from moderately lower to moderately higher in the US dollar added to the negative tone. The Commitments of Traders reports as of November 29th showed Non-Commercial traders were net long 159,663 contracts, a decrease of 12,956 contracts for the week and the selling trend is seen as a short-term negative force. Commodity Index traders held a net long position of 364,513 contracts, up 8,930 for the week which helped offset the long liquidation trend from trend-following funds.
Join the Discussion