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NEAR-TERM MARKET FUNDAMENTALS: The corn market closed higher for the third day in a row yesterday in conjunction with moderate buying support from funds. Corn followed soybeans and meal higher tied to the higher than expected crush rate for November. This in turn was tied to improved feed demand in the US which may be following an improving economic outlook according to many traders. This has not had a dramatic impact on corn demand yet, and corn lagged on yesterday’s rally. But export sales have moved higher for corn in 2 of the past 3 weeks and the USDA announced a sale of 116,000 tonnes of corn to an unknown destination yesterday morning. In addition, South Korea’s biggest feed maker is looking to buy up to 165,000 tonnes of corn along with 55,000 tonnes of feed wheat and 4,500 tonnes of barley. South Korea may have some catching up to do in the feed department according to one analyst since they announced today that imports of corn are down 19% to 6.6 million tonnes for the first 11 months of this year. South Korea is normally a very consistent importer and is the world’s third largest buyer. The USDA weekly crop update yesterday afternoon showed overall harvest progress at about 4% for the week last week to 92% harvested. Illinois, Indiana and Iowa were at 90%, 96% and 96% respectively. Nebraska and Minnesota were each at 91% complete. However, the biggest laggard was North Dakota at just 60% harvested, followed by Wisconsin at 85% and South Dakota at 82%. Forecasts call for dry weather across major harvest areas of the US through later this week with the exception of some light and scattered rains moving into the west central Corn Belt by Friday. Weather in Brazil has been mostly dry in the corn-growing provinces of Parana and Rio Grande do Sul which is welcome. Conditions are expected to be mainly dry over the next 2-5 days with a few light showers and some localized thunderstorms. This week’s export inspections in corn were 28.1 million bushels, about in line with trade expectations. An EPA spokeswoman indicated yesterday that the agency will issue final rules on revisions to the renewable fuel standards in early January.
TODAY’S GUIDANCE: The 3-day surge higher is a positive technical development and corn seems to have the longer-term fundamentals to push higher. However, the surge higher in the dollar might encourage some fund selling today. First support is at 402 and 396 1/2 for March corn with resistance at 413 and 425.
