March corn was trading 9 1/2 cents higher late in the overnight session. Outside market forces look bullish today with a lower US dollar and strength in equity and metal markets. China's PMI numbers this morning was seen as supportive for commodity markets. With the rally overnight, corn is just about back to the level hit just prior to the January USDA reports. The market is up as much as 56 1/4 cents from the January 18th lows. March corn closed sharply higher on the session yesterday and recovered most of Monday's break. The overnight rally took the market to the highest level since January 12th. Funds were noted buyers on the day and a private estimate for Argentina corn production below 19 million tonnes was seen as positive. The USDA lowered their Argentina production forecast to 26 million tonnes in the January reports from 29 million in December. The market pushed higher early in the session yesterday on positive input from outside market forces. Mexico production for 2011 was pegged at 19.2 million tonnes according to the Agriculture Minister. The USDA was at 20.5 million for the January update. For 2012, production is estimated at 21.8 million tonnes. After drought hit the Ukraine winter wheat crop hard, traders see Ukrainian corn production for the coming year up 10% to a record high 25 million tonnes as planted acreage jumps due to replanting of wheat areas which do not make it through the winter. Open interest Monday was up 587 contracts which came as a bit of a surprise to some traders who saw fund trader long liquidation selling as active. The market saw a late buying spree but the late push could not take out the early session highs. The surge in European wheat prices to the highest level in seven months helped to support corn as well overnight.
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