March corn was trading 3 cents higher late in the overnight session. Outside market forces look slightly positive today with a weaker US dollar and a firm tone for other commodity markets. March corn has consolidated since January 26th and found some support overnight from a positive tilt to outside markets. Traders view the export news as impressive but talk of sluggish feedgrain demand and talk that ethanol margins are slipping and could pull down the production pace helped to limit the advance. The USDA attache in Argentina pegged the corn crop at 21.8 million tonnes as compared with 26 million last month. Some traders see the crop as low as 17-18 million tonnes but most estimates seem to be near 20-21 million. The USDA attache in Mexico pegged the corn crop at 18.4 million tonnes from 20.5 million last month. March corn closed 1 cent higher on the session yesterday after choppy and volatile trade. Weakness in wheat clashed with strength in soybeans and strong export news to keep the trade choppy. Ideas that the cash market is still tight, better than expected export news and a turn from higher to lower for the US dollar helped spark some buying support. Improved weather for South America was seen as a negative force. Weekly export sales for corn came in at 912,000 metric tonnes for the current marketing year and 63,000 for the next marketing year for a total of 975,000 which was higher than expected. As of January 26th, cumulative corn sales stand at 65.9% of the USDA forecast for 2011/2012 (current) marketing year versus a 5 year average of 59.6%. Sales of 457,000 metric tonnes are needed each week to reach the USDA forecast. On top of the weekly sales, private exporters reported a sale of 107,340 tonnes of US corn to Japan. In addition, a Taiwan feed group will tender today for 47,000 to 60,000 tonnes of corn from the US or South America for March/April shipment. Open interest in corn was up 9,811 contracts to push to the highest level since late November. Some traders see the much warmer weather than normal for the past few months as a reason to suspect slow feedgrain demand and higher than expected stocks as of March 1st.
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