December corn was up 5 cents late in the overnight session. Outside market forces look mixed today with a choppy US dollar, weakness in energy and equity markets but a surge higher in metals. There have been no deliveries for the first three days of the delivery period for September corn. A serious long liquidation trend emerged yesterday, as the fund trader community seemed to view the September USDA reports as too long of a wait for confirmation of lower yield, and there is also confirmation that the FSA acreage data will not be used for adjustments in acres until the October report. This would be normal procedure for the USDA, but the USDA's release of the FSA data to the public last month has led to confusion over this matter. Talk of the overbought condition of the market and ideas that the upcoming world supply/demand report could show total Black Sea region corn exports adjusted higher by 2-3 million tonnes were also factors to spark the aggressive selling. A key trade house pegged the US corn yield at 146.3 bushels per acre after the close yesterday. This helped support the market overnight. If we plug in the yield into the supply/demand report and make no adjustments for demand or for a possible decline in harvested acres, ending stocks come in at just 148 million bushels. This would suggest that the market will need to see high enough prices to ration 400-600 million bushels of corn for the coming season. December corn closed sharply lower on the session yesterday, led by more aggressive fund trader selling. The market is already down as much as 41 1/2 cents off of Monday's peak. Weakness in other grains and wheat plus talk of the extreme overbought condition of the market helped spark selling. Corn then led the grain markets lower late in the session. Reports of cooler and wetter weather into the weekend after a few days of heat plus some reports of better than expected yield in parts of Illinois helped to pressure. Weekly export sales for corn came in showing cancellations of 320,900 metric tonnes for the current marketing year and 957,900 for the next marketing year for a total of 637,000 tonnes, which was higher than expected. As of August 25th, cumulative corn sales stand at 21.8% of the USDA forecast for 2011/12 (next) marketing year versus a 5 year average of 18.5%. Sales of 652,000 metric tonnes are needed each week to reach the USDA forecast. Ideas that feedwheat from Russia and higher than expected production of corn from Ukraine might spark sluggish export sales in the weeks ahead was seen as a negative force.
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