The corn market was lower on Monday morning as the selling that started on Friday continued. The May/July closed down about 17-18 cents and the December was down about 12 cents, both near the lows of the session. The corn market opened slightly higher, but quickly sold off, trading as much as 10 lower. It then recovered only to see more selling come in on the brief rally and that seemed to be the theme for the day. The corn market traded 5-10 lower for most of the morning until another round of selling took corn down 13-14 cents and then another round of selling in the last hour or so took it down 20 cents. The market wanted to talk about bean/corn spreading and talk of a big acre number from the USDA report on Thursday. With such a big report this week, we are probably seeing a lot of traders move to the sidelines as we could see a big swing either higher or lower depending on the numbers. This volatility has created a scenario that some traders just don’t feel the risk/reward is worth it. The market was also looking for more China sales on Monday morning which seemed to be the rumor that was making the rounds over the weekend. As the rumors continue, the market needs to see some confirmation or it will die. The market is worried about a bearish report, especially in old crop stocks which could increase on better efficiency because of an excellent corn crop last fall. The volume was ok at 274,000, but on the low side and funds were sellers of about 15,000 contracts.
Overnight, the corn market closed unchanged to slightly higher in the deferreds. The corn market traded both sides of unchanged and closed toward the bottom part of the 10 cent range. The grain markets were stronger most of the session, but sold off toward the end of the session. We continue to hear talk about a big acre number and a bigger stocks number because of greater efficiency. That is the way the market is leaning, but when talking to different analysts, they can make the case for a limit up or limit down move. There are also traders are buying beans and selling corn expecting a big corn acre number and a smaller bean acre number. On the other hand, I am being reminded that this is planting intentions and this can change, maybe dramatically, depending on the weather this spring. With the profitability high in both corn and beans, there won’t be a lot of farmers pushing to plant corn past a certain date. The corn market will probably be under pressure again today as traders take off risk ahead of the USDA report or traders want to position themselves for a bearish report. There seems to be commercial buying on deep breaks, but probably not before the USDA report and maybe not after the USDA report depending on the numbers.
Globex Overnight Contract Last Net Change High Low Volume ZCK11 670^4 -0^4 677^0 667^6 7811 ZCN11 678^0 0^0 683^6 675^0 4358 ZCU11 631^2 0^0 635^2 629^4 560 ZCZ11 599^0 2^0 601^6 596^0 2699
LaSalle Street News Early Opening Calls: steady, 1 cent better
LaSalle Street News Top News -- Dalian Jan. Corn futures were down -11 @ 2,396 yuan/mt. -- Liffe Jun. Corn futures were down -2.50 @ 226.50 euros/mt. -- Globex Corn Vol: 241,941; Pit Vol: 18,790; Open Interest change: - 13,886 -- Weather: 6-10 Day Forecast: Normal to Below Temps. Normal to Above Precip. -- Outside markets: Energy Complex -0.70 at $103.28; Gold & Silver: -2.9 at $1417.0 & -0.248 at $36.840; US $ +0.189 at $76.565
LaSalle Street News Cash Markets -- CIF Corn steady off 2. Mar. +51 to +54, Apr. +55 to +56, May +58 to +62, J/J +58 to +63, Aug. +95 to +1.00, Sept. +49 to +55, O/N +53 to +56
TREND: Corn is either all bids or all offers. It does not seem to be a comfortable intermediate level. Think that is because we are trading $7.00 and no one wants the risk unless forced to by circumstances? CK is 46 cents off the Fri highs at the close. The gap at 6.50 is starting to feel like a magnet but is still 20 cents away from the close tonight. Would not be surprised to see today's trade falter and reverse? Felt like there was a lot more spread liquidation that started the selling today but there was equally as much beans/corn and wheat/corn that took place.
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