May corn was trading 3 cents higher on the day late in the overnight session. Outside market forces look quiet overnight with mixed economic news out of China and consolidation-type trade in financial markets ahead of payroll numbers. The market has seen a fairly aggressive 3 day sell-off into the key USDA report this morning. For the report, traders see US ending stocks coming down to near 785 million bushels from 801 million last month due to better export demand. Lower production from South America is also expected to pull world ending stocks down to near 123.5 million tonnes from 125.35 million last month and from 128.83 million last year. Argentina production is expected near 21.3 million tonnes from 22 million last month and traders see Brazil production near 60.4 million from 61 million last month. Some traders see higher Brazil production as producers boost acreage for 2nd crop. May corn closed moderately lower on the session yesterday and the market is down as much as 33 1/2 cents from Monday's highs. Corn saw some strong gains early in the day led by supportive outside forces as the US dollar was lower and the global equity markets were strong. Strength in energy and metal markets added to the positive tone and a lack of deliveries was also seen as a positive force. However, positioning ahead of the USDA report, increased fund selling and news of a higher Brazil corn crop helped to pressure futures to the lowest level since February 22nd. Brazil officials pegged the crop at 61.7 million tonnes from 60.83 million last month as winter corn plantings jumped. On top of the weekly export sales report, the USDA reported a daily sale of 106,680 tonnes of US corn for delivery to Japan for the 2011/12 season. Net weekly export sales came in at 445,700 metric tonnes for the current marketing year and 60,000 for the next marketing year for a total of 505,700 which was below trade expectations. As of March 1st, cumulative corn sales stand at 72.5% of the USDA forecast for 2011/2012 (current) marketing year versus a 5 year average of 68.1%. Sales of 452,000 metric tonnes are needed each week to reach the USDA forecast. Funds were noted as active sellers again yesterday. South Korea seeks up to 280,000 tonnes of corn. A University of Illinois study suggested that the warm winters for Iowa and Illinois have no correlation with temperatures or yield for the following summers.
Join the Discussion