March corn was trading down 2 3/4 cents late in the overnight session. Outside market forces look quiet overnight but traders are nervous over potential macro economic concerns in Europe. There were still no corn deliveries against the December contract. The market remains in a long liquidation downtrend but found strong support on the move to new lows on Tuesday with a reversal low. Demand remains a negative factor for the market as US corn is high priced against other countries and against an increasing supply of feedwheat from Australia. If weather stays dry in Argentina and southern Brazil in the next few weeks and outside market forces turn a bit more positive, traders believe there could be a bounce from the oversold condition. Taiwan tendered for 40,000-60,000 tonnes of Brazil or US corn yesterday and bought 60,000 tonnes of corn from Brazil this morning. For the supply/demand update Friday morning, traders see ending stocks for the 2011/12 season near 830 million bushels as compared with 843 million last month and 866 million in October. While there is a stocks report in January which will give traders a better clue on domestic demand, traders see a revision higher in feed and ethanol usage as a reason for the stocks decline. The market faces a significant jump of near 6-8 million tonnes in world production if recent China and Brazil production ideas are revised for the report. Traders are looking for a slight increase in world ending stocks from the 121.57 million tonnes last month but without corresponding increase in demand, ending stocks could jump by several million tonnes. March corn has closed lower in 4 of the last 5 trading sessions. The market saw some higher trade early yesterday on weather concerns in South America but a weak demand tone helped pressure. Corn did not recovery yesterday when outside market negative forces subsided. The market found some underlying support from higher trade in soybeans and some weather concerns due to a dry and sometimes hot forecast for parts of Argentina and southern Brazil. Ethanol production for the week ending December 2nd averaged 954,000 barrels per day, up 2.58% from the previous week and up 1.6% vs. last year. Total Ethanol production for the week was a record high 6.678 million barrels. Corn used in last week's production is estimated at 101.6 million bushels as compared with a weekly average of 95.9 million bushels necessary per week to meet the USDA estimate. Stocks were 17.9 million barrels, up 5.2% vs. last week and up 9.46% vs. last year. Traders see weekly export sales near 550,000 tonnes for the weekly update in the morning. Brazil's Conab (government supply agency) pegged the 2011/12 corn crop at 60.32 million tonnes this morning which is up 5% from last year and compares with the current USDA estimate of 61.0 million tonnes.
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