July corn was trading 3 cents lower late in the overnight session. China futures were up slightly overnight. Outside market forces look slightly negative today with a strong US dollar and weakness in metal and equity markets. There were no deliveries for the third session in a row. Old crop contracts continue to see strong support from the cash market and from fears of extreme tightness during at the end of the 2011/12 season. In addition, producer selling is very limited during the planting season. Central Illinois elevators are bidding 50 cents over the July contracts for corn and are still not finding much producer selling. May corn is trading 27 cents premium to the July and this has short traders in May nervous that end users may decide to take deliveries. The bullish old crop situation clashes with the outlook for a surge in ending stocks for the new crop season. Traders are using near record yield believe that ending stocks could come in near 1.8 billion bushels for the first supply/demand outlook for the season next week. This compares with just 801 million bushels for the old crop season. Old crop stocks may need to be adjusted lower due to higher export projections unless the USDA finds another place to trim usage. Wet weather is slowing the planting pace but dryness is already an issue for the southeast producing areas and this is the corn which can come to the market early to ease old crop tightness. July corn was trading near the highs of the day-session with just ten minutes left in the session before breaking 8 cents rather quickly and closing 5 1/4 lower on the session yesterday. A faster than expected start to the planting season and near ideal weather outlook ahead helped to drive the market sharply lower. While the wet forecast may slow plantings, traders view the rain events over the next 10 days as beneficial for a fast start to the growing season for the corn already coming up. Funds were noted sellers late in the day to help pressure.
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