Corn futures prices are trying their best to keep pace with the skyrocketing Wheat and Soybean markets, as the battle for acreage next season begins. The growing demand for ethanol combined with solid animal feed demand, gave producers ample reason to plant Corn this year. And plant they did! With just under a quarter of the U.S. Corn crop harvested so far this year, reports are that Corn yields are coming in above earlier estimates, which may further increase the size of the Corn crop past the most recent USDA estimate of 13.3 billion bushels, which if true, would be the largest crop on record. Producers are expected to harvest the most Corn acres since 1933, according to the National Agricultural Statistics Service. However, prices continue to rise despite harvest pressure selling, as December Corn moves to 3-month highs this morning. This is a case where Corn is being carried along with Wheat and Soybean prices to prevent the spreads from becoming too far out of line. Demand for Corn will continue to grow, with Asian feed buyers switching to Corn from Feed wheat for animal feed. This morning’s USDA weekly export sales are expected to come in somewhere between 600,000 and 1.5 million metric tons last week. Traders should keep their eyes on the new-crop 2008 contracts for the grains, to see how the battle for acreage is playing out.

Looking at the daily chart for December 2007 Corn, we notice the rally in the overnight session sent Corn prices to highs not seen since the last week of June. Prices have moved well above the major moving averages, and momentum is on the rise. However, the 14-day RSI has moved into overbought territory, though only modestly, with a current reading of 74.75. The next area of resistance is not seen until the $3.90 area, with support found around the recent lows near $3.68. At the end of the overnight session, December Corn closed at $3.81, up 6 cents.

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