Pre-Opening Corn Market Report for 2/16/2011

March corn was down 2 3/4 cents late in the overnight session. Outside markets look slightly positive this morning with a weak US dollar and higher energy and equity markets. With other grains in a long liquidation mode, corn saw aggressive selling for part of the session yesterday and some weak trade again overnight. Corn sold off sharply during the session yesterday, but it did manage to recover much of its losses into the close. March corn broke to its lowest level since February 9th, the day of the USDA report and closed 5 1/4 cents lower on the day but up 9 1/2 cents off of its lows. Sharp declines in the wheat and soybean markets helped pressure corn early. Some improvement noted in the South American crops and recent rains in Argentina also pressured prices during the session. Egypt bought 120,000 tonnes of US corn, which also helped provide underlying support. Reports that 1.82 million tonnes of corn was damaged from the freeze in Mexico earlier this month was seen as supportive, but damage may have been a little less than earlier estimates. South Korea passed on a tender for 55,000 tonnes of GMO corn. News from the USDA baseline projections that planted acreage could jump 3.8 million from last year may have been a factor that sparked some of the long liquidation selling, as December corn seemed to lead the market lower. Expect traders to monitor usage data closely. Traders see feedlot supply up 4-5% for Friday's Cattle on Feed report. June hogs hit an all-time high, so the market does not see reduced livestock numbers ahead. Focus will remain on exports and ethanol demand.
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