March corn was trading up 2 1/4 cents late in the overnight session after trading both sides of unchanged in a 7 1/2 cent range. Outside market forces were slightly negative with a bounce in the US dollar and weakness in energy and equity markets. The market remains in a steep uptrend, but traditional technical indicators are showing an overbought reading, and traders see index fund rebalancing as a negative force this week. The rally has pinched ethanol production profit margins into the red, and this could slow usage in the short term. The lack of rain in the forecast for Argentina until January 10-11 is a significant concern, as traders see nearly half of the crop pollinating at this time and stress having the potential to cause irreversible reductions in yield. March corn gapped sharply higher on the session yesterday and closed 12 higher on the session but near the middle of the day's range. A bullish tilt to outside market forces plus continued dry weather concerns for Argentina helped to drive the market sharply higher. A sharp drop in the US dollar, a surge higher in gold and crude oil, and sharply higher equity values in China and the US helped to drive the market to its highest level since November 10th. Some profit-taking after the recent surge plus the tendency for producers to move more corn onto the market early in the year were seen as limiting forces for the upside. In addition, traders see index funds as sellers for the first week of the year as they rebalance their positions for the coming season, and this may have also limited the advance. The weekly export inspections report, which was released during the session yesterday, came in at just 24.6 million bushels, which was well below trade expectations. Shipments need to average 29.8 million bushels per week to reach the USDA forecast for the season. Traders see cheap Australian feedwheat as competition on the world market.