The corn market was higher on Friday on the back of better than expected weekly export sales, the price of soybeans reaching 34 year highs, and a "buy" commodity attitude with the outside markets posting strong rally's. The March contract closed 7 cents higher right up against the daily highs. Weekly export sales were strong once again at 1.845 mil vs. estimates of 1.3-1.5 mil. This seemed to give the corn market the kick start it needed and then beans rallied helping support corn. Beans reached 34 year highs on Friday on the back of impressive weekly export sales in beans and bean oil. The outside commodity markets also contributed to the rise in the grain markets as gold was up over $25 and crude was up 90 cents as it tries to continue its fight to the magical $100 per barrel. Traders also pointed to technical buying in the corn market as it made another new weekly high close, the highest weekly high close since June and the RSI has not reached a point where the market would be considered overbot. Weather in the US has moved to the back burner here in the US, but weather in So. America will start to be closely watched for any chance of problems. The world is dependent on a good corn crop out of Argentina and Brazil. Funds were net buyers of 4,000 contracts on decent volume, especially for a shortened holiday session.
eCBOT was stronger on Sunday night as the grain market continued the rally from last week. The March contract closed 4 ¾ higher after the 7 cent rally on Friday. Beans and bean oil remain the leader of the grain complex as both of those markets posted new highs overnight. The corn market is a follower right now because of the huge US corn crop, but the world's demand for corn is also helping to support the corn market. With last weeks corn sales included, the year to date sales are 1.280 bil bu vs. 950 mil bu last year. This number is only expected to widen every week through the end of the year. The corn market should open higher today but it will look to the outside markets and the bean complex for direction. China is the driving factor for the grain markets right now and you have to be careful to pay attention to not what they say but their actions. China has a history of trying to out fake the market with their rhetoric before they actually make their trades. Keep an eye on the crude and the soybean market today as they will lead the grain complex.
eCBOT Overnight
Contract Last Net Change High Low
ZCZ7 393^4 4^4 394^0 387^6
ZCH8 410^4 4^6 411^0 404^6
ZCK8 420^4 4^2 421^0 415^6
ZCN8 429^0 4^2 429^0 423^2
Early Opening Calls: 3-4 higher
Top News
-- Morocco's 70,000 mt Corn tender bids deadline expected to close Nov 27
-- Friday Export Sales Recap: Corn 07/08 Export Sales Net: 1.845 mln mln mt; 08/09 Net: 1,500 mt
-- Dalian Corn futures 13 Yuan/mt higher.
-- eCBOT Corn Vol: 106,627; Pit Vol.: 23,089; Open Interest change: +3,390
-- Weather: 6-10 Day Forecast: Normal to Below Temps. Above Normal Precip. The Corn Belt will see showers and light snow today. Tuesday looks dry.
-- Outside markets. Energy: crude 14c higher at 98.31/bbl, products 50-100 pts higher ; Gold $5.00 higher at $829.70/oz & Silver: 3.5c higher at $14.76/oz; US $ mixed, lower vs. Euro & slightly higher vs. Yen
Cash Markets
-- CIF Corn off 1 to 5. LH Nov. +46 to +49, Dec. +52 to +53, Jan. +52 to +53, Feb. +49 to +52, Mar. +49 to +51, A/M +40 to +44 J/J +42 to +45
If you have any questions, or if you would like to discuss specific trade recommendations on any markets, contact me directly.
Jim Riley
Linn Group
877-787-6278
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