May corn was trading 5 cents higher late in the overnight session. Outside market forces look positive for today with a slightly lower US dollar and some strength in metal markets. Solid export demand news and ideas that the export pace can remain strong over the near-term has helped to support the market off of the 3-week lows from yesterday. High prices in China and the lack of a significant exportable surplus of corn in South America could keep US exports strong in the months just ahead. In the first official crop estimate for Argentina, the Farm Minister pegged the crop at just 20.5 to 22 million tonnes which is down slightly from the USDA estimate just last week at 22 million tonnes and also down from the Buenos Aires Grains Exchange estimate of 21.3 million tonnes. Argentina produced 22.9 million tonnes last year but traders were hoping to see 30 million tonnes this year before the dry weather hit. May corn closed sharply higher on the session yesterday and near the highs as a general perception that recent lower prices have attracted strong demand helped to support more active buying. The market pushed down to the lowest level since January 24th but news that export demand improved on the recent break plus a shift from negative to positive for outside market forces helped to support the strong gains. Weekly export sales came in at 1.006 million tonnes for the current marketing year and 61,500 for the next marketing year for a total of 1.067 million tonnes. Cumulative corn sales stand at 67.9% of the USDA forecast for 2011/2012 (current) marketing year versus a 5 year average of 64.0%. Sales of 473,000 metric tonnes are needed each week to reach the USDA forecast. In addition to the weekly sales, talk that South Korea may be active buyers on the break this week and ideas that producer selling remains tight helped to support the strong rally back into the recent trading range. Ideas that the market is a bit oversold after the recent set-back and talk that China may be a buyer if the market breaks too far helped to provide some underlying support as well. Gulf basis was a bit weaker for Feb shipment but up 1-2 cents for March, April and May shipment.
Join the Discussion