March corn was up 4 cents late in the overnight session. Outside markets were quiet. The market remains in a steady uptrend with December corn posting new highs for the move overnight. Strength in wheat and ideas that the world needs higher production ahead helped to support new crop grain contracts in recent days. Absorbing the bearish news from China and closing firm was seen as a positive development for the grain markets yesterday. Brazil officials pegged the corn crop at 54.5 million tonnes, up from their January forecast of 52.72 million. The market saw some late buying support yesterday to pull futures back up to near unchanged late in the day, as new highs for the move for wheat and a late jump in soybean prices lent support. Talk of good growing conditions in Argentina and ideas that the market is overbought helped to trigger early weakness. News of a potential slowdown in the China economy due to interest rate hike plus some follow-through long liquidation from the weak close Monday helped to pressure the market early yesterday. Traders are exepecting to see higher ethanol usage and lower ending stocks in this morning's supply/demand update. Many traders are looking for a decline of 5-15 million bushels in ending stock from 745 million estimated last month. Traders also see tighter world ending stocks as Argentina production is expected to be adjusted lower. Talk of the overbought condition basis the Commitment of Traders reports this past weekend, which showed a near record net long position from non-commercials (funds), was also seen as a reason for the early sell-off. The market found support from the surge in wheat prices and a recovery in many commodity markets.
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