Pre-Opening Corn Market Report for 1/28/2011

March corn was up 2 1/4 cents late in the overnight session. Outside forces look mixed to slightly positive. The corn market continues to consolidate near the January 21st highs, but it came under pressure yesterday from sluggish weekly export sales. Traders see that high world corn prices sending demand to Australia feedwheat as a reason for the slower US corn exports. Traders remain very sensitive to short-term demand factors with extremely tight projections for US corn ending stocks. A sell-off in the wheat market along with some general weakness in energy and gold yesterday sparked a long liquidation sell-off in corn that it close moderately lower with an inside trading session. The market saw a long liquidation selling trend develop shortly after the opening that pushed corn sharply lower on the session, as a slower than expected export sales report and weakness in outside markets sparked increased selling. Weakness in wheat and talk of the overbought condition of the market added to the negative tone. Weekly export sales for corn came in at just 414,700 tonnes for the current marketing year and 132,800 for the next marketing year for a total of 547,500 tonnes. As of January 20th, cumulative corn sales stood at 56.7% of the USDA forecast for the 2010/11 season, compared with the 5-year average of 57.9% sold for this time of the year. Sales of 670,000 metric tonnes (old crop) are needed each week to reach the USDA forecast. News that two cargos of corn had been shipped to Spain from Canada in the last month suggests tightness in feedgrains in Europe, as Canada is normally an importer of corn and Europe normally has easier access to feedwheat from Eastern Europe and Russia. India was a noted seller of 25,000 to 30,000 corn, offering it at lower prices than South America corn. Ukraine sold Russia about 100,000 tonnes of corn.

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