July corn was trading 1 3/4 cents higher late in the overnight session. China futures were down 0.4% overnight. Outside market forces look slightly negative today with a firm US dollar and weakness in metals. Equity markets are firm. There were no deliveries for the forth session in a row. The corn market followed wheat lower yesterday and technical selling accelerated late in the day. Ideas that the earlier than normal wheat crop harvest will be used as a feed (cash wheat much cheaper than corn) helped to pressure. Traders see soft red crops in the east moving to feeding operations in the southeast and also see hard red crops which are looking to mature near 2-3 weeks earlier than normal to help ease corn tightness in the southern plains feedlot regions. July corn closed sharply lower on the session yesterday as fund trader selling intensified late in the day. A bearish weather outlook, continued talk of higher yield potential for the new season and a sharp set-back in wheat were all factors to spark long liquidation selling. Once again, traders are indicating that US corn is expensive to wheat, Argentina corn and Brazil corn. In addition, there is talk that the Brazil corn crop could be higher than expected for next week's USDA update. Extra corn was planted after the first soybean crop came in below expectations and early. Private exporters reported the sale of 130,000 tonnes of US corn to unknown destination for the 2012/13 season. South Korea bought 58,000 tonnes of corn. Weekly ethanol production was up 3.3% vs. last week and up 2.2% vs. last year but the surge in cash basis for corn and sluggish energy values has helped to weigh on margins.
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