March corn was up 4 3/4 cents late in the overnight session. Outside markets look less negative for today. The market managed to consolidate the steep gains off of Wednesday's lows with choppy and lower trade yesterday. The USDA Outlook conference is painting a supportive outlook for the corn market for the coming season. The message seems to be that it may take more than one year for the corn market to dig out of tightness and to even avoid extreme tightness for the coming season, a big jump in plantings and a record crop will be necessary. Ideas that the gasoline rally will help slow the heavy long liquidation selling helped to provide some underlying support. Open interest is down 84,683 contracts in just the last few days indicating that funds have lightened up on longs. March corn closed moderately lower on the session yesterday but futures managed to trade slightly higher on the session late in the day before a set-back into the close. The market continued to see a general long liquidation trend early yesterday even though crude oil slipped well off of the overnight highs, the US dollar was weaker and equity markets recovered. Higher stock markets overnight helped ease fears that the global economy will weaken. The USDA Outlook Forum left the planted acreage estimate this year at 92 million acres. Chief Economist Glauber is using a yield of 161.7 bu/acre to see corn production reach 13.73 billion bushels. While this would be a record high production total, ending stocks are pegged at just 865 million bushels for the 2011/12 season. This is a stocks/usage of just 6.5% as compared with 5% this season and 13.1% for the 2009/10 season. Corn use for ethanol was pegged at 5.0 billion bushels as compared with 4.95 billion this season and the baseline projections of 4.875 billion bushels. Exports are projected at 2.0 billion bushels from 1.95 billion this year. South Korea bought 55,000 tonnes of corn. China imported just 1,875 tonnes of corn in January. Last year, China imported 1.6 million tonnes which was up from a very small amount in 2009. Mexico's Ag Minister cut the production outlook for the season for corn to 23.3 million tonnes from 25 million as the previous estimate due to damaging freeze. US ethanol production for the week ending February 18th averaged 888,000 barrels per day. This is down 0.56% vs. last week and up 55,000 barrels per day or 6.6% vs. last year. While the weekly pace was slightly below the weekly average necessary to reach the USDA projection, traders see rising production ahead as margins improved this week. Traders see weekly export sales for release before the opening near 900,000 tonnes as compared with a weekly average of 625,000 tonnes necessary to reach the USDA projection.
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