The corn market closed around unchanged in the old crop and higher in the new crop as the early rally finally ran into some selling that continued throughout the day and both markets closed off the highs. The March contract opened strong, about 11 higher, but it couldn’t hold the grains and sold off trading down closed to unchanged before stabilizing around the 640 level. The corn market traded in a relatively tight trading range after the initial volatility, but that changed in the final 45 minutes. The March contract traded down lower on the day around 12 40, but quickly rebounded back to about 5 higher, but in the final 5 minutes, corn sold off again and closed around unchanged. There wasn’t any new news stories, but we are finally starting to see some farmer selling as the March contract is trying to get back up to the psychological 6.50 level. The US$ also added pressure to the grains by rallying off the lows from early in the session and when there isn’t any new news, traders will watch the outside markets. Weekly export sales were good, so that helped corn early. The corn market has really broken into 2 markets with the old crop and new crop having very different dynamics. The volume was pretty good at 345,000 contracts and funds were small buyers.

Overnight, the corn market closed lower, taking back the losses that happened in the final minutes of trading on Thursday. Both the March and December contract closed up about 4-5 cents near the highs of the session. Today is February option expiration which usually isn’t a big deal, but we do have corn up over 25 cents this week so it may have caused some option players to pay attention today. There is a lot of attention being paid to corn stocks, both here in the US And world, and that talk will only intensify as we get closer to the start of the planting season. Don’t forget that the February starts next week and this is the month when the insurance levels are set. Last year, we have a corn price of 6.01 and it will take a big rally this year to get anywhere near that price level. With that price, many farmers felt it was a no brainer to plant corn, so it will be interesting if that happens this year if we don’t have such a high insurance price level. The corn market will be called higher this morning, in line with the closes overnight, but the outside markets are a little more negative than when grains closed, so that could add some pressure.

GLOBEX Overnight Contract Last Net Change High Low Volume ZCH12 639^2 4^6 640^6 631^0 17166 ZCK12 644^6 4^6 646^0 636^4 3235 ZCN12 649^0 5^2 650^0 640^4 5874 ZCU12 592^6 4^0 592^6 587^6 442

LaSalle Street News Early Opening Calls: 3-5 higher

LaSalle Street News Top News -- Cash sources say STX and CHS sold a total of 110,000 mt US Corn to S Korea's Nongyhup Feed on Friday. Earlier traders said Nonghyup Feed was seeking up to 250,000 mt of corn for May-June delivery in a snap tender announced Friday. -- Buenos Aires Grain Exchange updated corn/soy production estimates, seeing 11/12 corn production at 22.0 mln mt and soybeans at 46.2 mmt -- Buenos Aires Grain Exchange report estimates Soybean planting this week at 96.3% complete up from last week's 91.7% complete. They say 18.16 mln ha have been planted out of the 18.85 mln ha expected to be planted -- Buenos Aires Grain Exchange weekly report pegs Sunseed harvest at 21% complete, with 382,463 ha collected out of the 1.84 mln ha expected to be harvested -- Buenos Aires Grain Exchange weekly report pegs Corn at 95.0% complete (3.514 mln ha have been planted so far) up from last week's 91.4% complete. Total Corn acreage is seen at 3.70 mln ha. -- In Brazil Rio Grande do Sul agency, Emater, puts soybean crop estimate at 8 mln mt down 750,000 mt from their prior estimate -- Emater agency in Brazil puts Rio Grande do Sul corn crop estimate at 3 mln mt down 300,000 mt from their prior estimate -- USDA announced Thursday that begin Feb 13th at 11:00 am CT, it'll kick off releasing a new 10 yr ag projection report from the chief economist office. Projections cover crop and livestock commodities, agricultural trade and aggregate indicators, such as farm income and food prices through 2021. USDA says the long term projections will not represent a USDA forecast, but a conditional, long-run scenario based on specific assumptions about farm policy, weather, the economy and international developments.

-- Yesterday's USDA Export Sales report, new 11/12 export sales in corn amounted to 35.2 million bushels, and 34.6 million bushels were shipped this week -- As reported yesterday 413 million bushels of corn export sales are open for the 11/12 crop year, and 638 mil bu have been shipped so far this year; this compares to 461 mil bu open and 645 mil bu shipped this week last year, acc. to USDA -- Biobutanol pioneer Gevo is suing Dupont for patent infringement on joint venture "Butamax" -- Pending Tender: A gov't official in Japan announced a new SBS tender that wraps up on Feb 1st, they're seeking 100,000 mt of feed Wheat and 200,000 mt of feed Barley for shipment by May 31 -- Pending Tender: In a Feb 2nd deadline Jordan is seeking 100,000 mt of feed Barley from optional origins. -- Dalian commodity markets on holiday -- Liffe Mar. Corn futures were down - .75 @ 204.50 euros/mt. -- CBOT Corn Volume & Open Interest for January 26th 2012 was 345,597; Open interest increased +10,006 to 1,221,606. -- CBOT Ethanol Volume & Open Interest for January 26th 2012 was 867; Open Interest increased +58 to 10,227. -- Outside markets. Crude Oil up 44c @ $100.14; Gold off -$4.10 @ $1722.60 ; Silver off -20c @ $33.54; US $ index off -22 pts @ 79.29

LaSalle Street News Cash Markets Bean Barge Corn Barge SRW Barge HRW Track Ill Riv Frt Jan +71/77 H +88/95 H +73/77 H 450 Feb +68/72 H +72/76 H +75/80 H +110/115 H 415 Mch +65/70 H +64/66 +75/82 H +107/115 H 400

Truck Beans Corn Wheat Meal Hi-pro Oil Chicago +0 H +15 H +0 H
Toledo -18 H +6 H +23 H
Dec ILL +8 H +28 H -12 H +50 H

TREND:

Corn market ran into cash selling today. Basis levels sold off slightly from early highs. Bothered that spreads are not responding to the cash strength. Typical local trade in the spreads is concerned about the index fund roll of long positions out of delivery month but that trade is 3 to 4 weeks away? Got close to the 6.50 targets and actually exceeded them if cash taken into consideration. Look for support at 6.25 to 6.18. Will see more active user buying there. That trade has backed off as basis and futures have gain all week.

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