May corn was trading 13 cents higher late in the overnight session. China futures were up 0.4% overnight. Outside market forces look mixed overnight as a strong dollar and weakness in metals clash with a strong stock market and firm energy prices. A combination of strong cash markets in the US, concerns for export availability from Argentina, news of quality issues in Ukraine and talk of the oversold condition of the market were all factors which helped to spark the rally overnight. In addition, China weather concerns and talk that China might move to an easier monetary policy added to the new buying and short-covering. A China government research firm believes that agricultural product supply will continue to tighten for the coming year due to expanding demand. After eight years in a row of expanding production and a record grain crop of 571.21 million tonnes last year, the trade deficit for agricultural products is expected to widen. Japan corn buying from the Ukraine and Eastern Europe has apparently been suspended due to poor quality and could resume only after the next harvest. Israel bought 22,000 tonnes of US corn and 20,000 tonnes of US meal. South Korea seeks 55,000 tonnes of optional origin corn for August delivery. Argentina authorized the export of 3 million tonnes and the government sees 21.2 million tonnes as the export forecast for the 2011/12 season. Corn closed sharply lower on the session yesterday for old crop and just slightly lower on the session for new crop with May corn pushing to the lowest level since January 18th and matched the lows from this date. Funds were noted as active sellers on the session and the July/December spread pushed down to just 65 cent premium July from a premium of $1.07 1/2 on April 3rd. A negative tilt to outside market forces helped to spark the early weakness and then fund traders and spread traders were liquidating old crop corn longs and also old crop/new crop spreads which helped spark heavy selling in the May and July contracts. A bearish weather outlook for planting next week after a little more rain on the weekend kept the market on the defensive. Ethanol production for the week ending April 13th averaged 884,000 barrels per day. This is down 1.3% vs. last week and up 3.3% vs. last year. South Korea bought 65,000 tonnes of optional origin corn. Traders see weekly export sales, for release before the opening, near 825,000 tonnes as compared with 975,800 tonnes last week.