December corn was up 9 1/4 cents late in the overnight session. Outside market forces look supportive today with a weaker US dollar and positive action for world equity markets. December corn is up as much as 10.3% in just seven trading sessions with the surge higher to new contract highs overnight. This marks 6 of 7 days of new contract highs. Supply issues continue to support the uptrend, and fund traders have returned as active buyers. Open interest inched up to the highest level since June. In the annual Pro Farmer crop tour, the average corn yield estimate came in at just 147.9 bu/acre, compared with the USDA estimate from the August report at 153. If we plug in this yield estimate and leave all the other numbers unchanged, ending stocks come in at just 238 million bushels with a stocks/usage of 2.1%, both record lows. Keep in mind, this does not have any adjustments in harvested acres, and many traders believe there will be 400,000 to up to 1 million acres lost due to flooding on key rivers and too much rain into planting season. The Commitments of Traders reports as of August 23rd showed non-commercial traders were net long 317,415 contracts, an increase of 6,161 contracts for the week. Commodity index traders held a net long position of 351,218 contracts, up 4,696 for the week. The buying trend of the funds is seen as a short-term positive force. December corn closed sharply higher on the session Friday, with fund traders noted as aggressive buyers. Fears of declining yield and some better export news helped support the run higher, and weakness in the US dollar also was supportive. Private exporters reported a sale of 365,760 tonnes of US corn to an unknown destination. Of the total, 234,840 tonnes are for the 2011/12 season and the rest for the 2012/13 season. Traders are expecting another decline in crop conditions ratings of 1-2% for this afternoon's update from 57% posted last week. This would suggest 55-56% rated good to excellent as compared with 62% on July 31st, which is about the time of the USDA crop production survey. Global economic concerns persist, but the positive reaction for equity markets after the Fed Reserve Chairman speech Friday lent support.
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