July corn was trading 1 1/2 cents higher late in the overnight session. China futures were down slightly. Outside market forces look bearish today with a strong US dollar on European economic concerns and sharply lower trade for equity and energy markets. The market recovered some of the losses from Friday overnight but a bearish tilt from outside market forces might slow new demand. Rumors of China buying US corn continue but there has been no confirmation of buying on the daily wires. China Grain Reserves Corp (Sinograin) who manages the state grain reserves may have bought corn last week to replenish reserves. Most traders believe this will be for new crop corn. Traders see US corn to Sinograin (exempt from the 13% VAT) costing near $330 per tonne as compared with trade near $400 in major consuming areas of China. May corn closed 8 1/2 cents lower on the session Friday and down 16 3/4 cents for the week. A continued strong cash market and supportive trade in outside markets helped to spark the early rally to just shy of the highs for the week. However, the outlook for favorable planting weather this week may have been a factor to spark selling pressures with the market pushing moderately lower on the day into the mid-session. Rumors of China buying old crop corn were left unconfirmed with no new export sales news from the USDA and this may have added to the negative tone. In addition, bean/corn spread buying may have pressured the market as well. China imported 472,000 tonnes of corn in March which pushed the three-month total to 1.74 million tonnes, up from just 5,400 tonnes last year. The Commitments of Traders reports as of April 17th showed Non-Commercial traders were net long 192,871 contracts, down 34,325 contracts for the week. The long liquidation selling trend is seen as a short-term negative force. Commodity Index traders held a net long position of 403,955 contracts, up 5,689 contracts for the week. The weather this week looks cooler than expected and traders will monitor parts of the eastern Corn Belt for freeze issues. The warm-up was expected for the middle of this week seems to be pushed back to early next week which will keep early growth slow. Traders see weekly updates showing that near 37% of the crop is planted as compared with 8% last year and 14% as the 20-year average.
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