March corn was up 1 1/2 cents late in the overnight session. Outside forces look slightly supportive. The weaker US dollar and a continued strong demand tone helped support the corn prices recently, and the market is still hovering near the contract highs even with better weather in Argentina and continued talk of extra Australia feedwheat coming on the world market. In addition, talk of the overbought condition as reported in the Commitments of Traders report has failed to produce anything more than a shallow correction. Demand issues still look mostly supportive, as the ethanol usage pace is running ahead of the USDA forecast for the season and the surge in livestock prices to near record highs does not leave much room to expect a further reduction in livestock herds. A surge higher in energy markets along with unexpected weakness in the US dollar, the port strike in Argentina and strong wheat prices helped support renewed buying interest from fund traders yesterday and a sharply higher close. The close was near the highs of the day, with March corn recovering all of last week's losses plus more and December corn experiencing a new high close. The surge higher in the wheat market plus ideas that corn usage numbers are not slowing enough on the price rally to ease tightness ahead lent support. The US dollar pushed to the lowest level since November, and New York crude oil has rallied more than $7/barrel in just two trading sessions. This, plus the continued port strike in Argentina were seen as positive forces. Weekly export inspections, released during the session yesterday, came in at just 18.7 million bushels, which was well below trade expectations and below the 26.5 million reported last week and the 41.3 million need each week to reach the USDA projection for the marketing year. A continued strong rally in livestock prices to historical high prices has added to the positive tone. Slow producer selling kept cash basis bids firm yesterday.
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