The corn market closed lower on Wednesday as the early gains weren’t supported after taking out recent highs and all the grain markets closed lower. The December corn closed down about 4 cents which was right on the lows and about 11 cents off the highs. The market was higher right from the opening and held onto the early gains for the first 2 hours of the session before going lower on the day and never really recovering much. With December option expiration on Friday, there is a lot of speculating that we are seeing some jockeying among option players right now. The December corn option is usually the biggest option expiration for the corn contract, so it can see a lot of volume and/or jockeying. The $4 strike price has the most open interest, so if the market gets too far away from that strike price before the close tomorrow, we could see some extended moves. The weather remains the same with rains across parts of the Midwest, but as one farmer told me, at this time of the year, unless it is really raining or we can’t get into the fields, we just keep plugging along. We continue to hear about issues with crop quality, but this seems to be in limited areas and not across the whole country and it is keeping the corn market nervous. The volume was good at 259,000 and funds were sellers of about 7,000+ contracts.

Overnight, the corn market continued to go lower following the late day break yesterday. The corn market closed down about 6 cents near the lows of the night session. The outside markets provided some pressure this morning with the US$ higher and stocks and crude lower, but it looks like the corn market is under harvest pressure and the funds weren’t here to support it. Weekly export sales this morning were a little smaller than the market was expecting. The market was expecting export sales of 400-500K and actual sales were 353K. I don’t know how much effect this will have on the corn market as many are not really watching export sales unless we see something out of China. It will be interesting today to see the corn market finds any buyers now that it has sold off the highs early in the day yesterday. We didn’t see any fund support yesterday, so we will see today. With the lack of quality and the wet crop coming out of the field, we are seeing a lot of corn being sold into the market right out of the field, so that is creating pressure we haven’t seen in the past because of so much on farm storage today. The opening call this morning will be inline with the overnight calls down about 4-6 cents and then it will look for support. Keep an eye on the open interest in different strike prices for price direction, right now, $4 strike seems to be the key.

Globex Overnight

Contract Last Net Change High Low Volume ZCZ9 392^4 -5^4 399^4 390^0 8646 ZCH10 408^0 -5^6 415^2 405^4 4134 ZCK10 417^6 -5^6 424^6 416^0 1246 ZCN10 425^2 -5^4 432^2 423^0 707

Early Opening Calls: off 3-5 cents

Cash Markets -- CIF Corn steady off 1: Nov. +45 to +47, Dec. +48 to +50, Jan. +38 to +40, Feb. +40 to +42 ,Mar. +40 to +42, April +40 to +42, May +37 to +40, June +37 to +40, July +37 to +40

TREND:

We continue to have a choppy s/t trade in the corn market as December stalled near the $4.10 area. This should force another s/t break with support in the $3.92 to $3.90 area. Look for buying there. Right now, we still have a trading range of $3.90 to $4.10. The October highs at $4.13 ½ are the key to a new bull wave here. Note that March tested its October high at $4.24 ½ and slowed as well. However, this pattern shows potential for another upswing. Expect the $4.00 to$4.05 area to offer support. Look to buy breaks there.

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