March corn was trading 4 1/4 cents higher late in the overnight session. Outside market forces look supportive this morning. The market has remained in a relatively tight consolidation in recent weeks as tightness in old crop supply and ideas that exports could improve ahead have been offset by increased concerns that ethanol margins are weak and that plants will slow or suspend operations. Average ethanol profit margins for Iowa plants have been negative for 5 of the past 7 weeks and the negative margins this week are the worst since June of 2008. Traders see the USDA supply/demand reports for release on Thursday morning showing a drop in US ending stocks of 50-75 million bushels due to expanding export demand. Ending stocks in January were pegged at 846 million bushels. Traders see Brazil production near 59.2 million tonnes from 61 million in the last USDA update. Argentina production is expected near 21.6 million tonnes, down from 26 million in January. March corn closed slightly lower on the session yesterday but up from early-in-the-day lows. A bearish tilt to outside market forces such as the US dollar, European debt issues and energy prices plus continued talk of slowing demand from the US ethanol industry helped to spark some early selling pressure. Talk that US producers will plant the most corn since 1944 this coming season added to the negative tone. A turn from negative to positive for energy and metal prices and a rally in the US stock market helped to support. Ethanol demand bulls were hit with news yesterday that there are new measures in a House of Representatives committee to halt approval of E-15 ethanol until more testing is complete.
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