May corn was trading 1 1/2 cents lower late in the overnight session. Outside market forces look bearish this morning with a strong US dollar and weakness in metal, energy and equity markets. The break this week seems to be attracting increased interest from South Korea and other normal importers who may get more active on the break. Producer selling, however, has been slow and traders will watch basis levels for clues on the willingness of producers to move old crop corn. Ethanol demand did not slow as much as traders had anticipated and margins are still weak but not as poor as two weeks ago. China and Argentina have finally signed deals which will allow China to import corn from Argentina and this may have been a factor for the aggressive selling in corn yesterday. With the Argentina drought, traders believe it may be a few more months before Argentina begins selling to China. China corn prices are still high and are at a huge premium to the US price so traders will be watching for signs of China imports anytime soon. Israel private buyers bought 30,000 tonnes of feed wheat and 40,000 tonnes of corn from the Black Sea region. May corn closed moderately lower on the session yesterday and pushed to the lowest level since January 24th. More optimism in Europe helped leave a bullish tilt to outside market forces early yesterday but the upside was limited by more soybean/corn spread buying and continued concerns for higher production and ending stocks for the new crop season. When outside market forces shifted from positive to negative, the market pushed through Tuesday's and then last week's lows to trade sharply lower on the day into the close. South Korea feed makers are in the market for 350,000 tonnes of corn for May-June arrival. Ethanol production for the week ending February 10th averaged 928,000 barrels per day which was better than expected with many traders looking for a further decline from last week. This was up 0.54% vs. last week and up 3.92% vs. last year. Total Ethanol production for the week was 6.496 million barrels. Corn used in last week's production is estimated at 98.85 million bushels. Corn use needs to average 94.5 million bushels per week to meet this crop year's USDA estimate. Stocks were 21.49 million barrels. This is up 2% vs. last week and up 9.8% vs. last year and a new record high. Open interest was up 14,504 contracts Tuesday. For the weekly export sales report, for release this morning, traders see corn sales near 750,000 tonnes.
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