March corn was down 15 1/2 cents late in the overnight session. Outside markets looked slightly positive. The general idea that rising food and energy prices could derail the global economy and cause a decline in consumer demand helped spark some of the early selling yesterday, but it appears that the weaker technical action sparked aggressive long liquidation selling to drive the market limit-down. A lack of obvious fundamental forces that could have sparked a 67 3/4 cent break from yesterday's contract highs for March corn has traders looking at technical factors as the reasons for the steepness of the decline. Talk of the high open interest, the overbought condition of the market helped pressure the market, but there were some signs of slower ethanol industry demand. Corn saw massive selling on very high volume into the mid-session, which drove futures limit-down yesterday. March corn closed 44 1/2 cents off of the contract and multi-year high, and the sweeping reversal was seen as a negative technical development. In addition, the market saw a gap lower opening with the overnight session. Traders see higher planted acreage estimates from the USDA Outlook Conference for later this week and threats that the continued unrest in the Middle East as potential negative forces. A surge higher in energy prices and increased expenditures for food and energy from developing countries might slow global growth. Weekly export inspections, released during the session yesterday, came in at 38.063 million bushels. This was near the high end of expectations. With higher gasoline prices, lower natural gas values and sharply lower corn prices, ethanol margins may be improving.
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