It was a very quiet day in the corn market yesterday as the outside markets were quiet and grains chopped around ahead of the USDA report Wednesday morning. The July and December contracts closed right around unchanged, which was in the middle of a small 4 cent trading range. The grain markets continue to bye time until the USDA report with most traders unwilling to step out and take positions in front of the USDA report. The general sentiment when talking to traders and analysts is that they are expecting a drop in 2009 production tomorrow, but on the other side, somebody reminded me yesterday that big crops get bigger. The warm and wet weather over the next week is receiving mixed views from farmers and analysts. The rain and warmth are causing the snow pack to melt which is causing flooding, but as one farmer said, I would rather have flooding in March than April. The report on Wednesday morning will probably a non-event, but it is still being held over the market. There is still some concern about a delay in spring planting which is probably helping to hold up prices because technically and fundamentally, corn is negative. The volume was weaker at only 148,000 contracts and the funds were even on the day.

Overnight, the corn market was lower on the negative outside markets. The July and December contract closed down about 4 cents near the lows of the day. The outside markets were negative for the grains with crude lower and the US$ higher and with the lack of new news and traders unwilling to take on new positions, that was all it took. The US$ was up over 30 points and crude was over $1 lower which pushed grains toward the lows of the session in the last 15 minutes of trading. I would expect the corn market to not get too carried away to the downside today with crop report tomorrow. We feel that big crops get bigger and the surprise tomorrow could be that 2009 production actually gets bigger which could surprise the market. On the other side, I still think it will be tough to kill the corn market until we start planting which could be weeks away. Farmers in the south and southeast are currently experiencing planting delays which could have an affect on the market down the line. The corn market will be called 3-5 lower this morning but watch the US$ as we get closer to the opening for better direction.

Globex Overnight Contract Last Net Change High Low Volume ZCH10 360^4 -4^0 364^4 360^4 3674 ZCK10 371^2 -3^6 375^2 371^0 7659 ZCN10 382^0 -4^0 386^0 382^0 3058 ZCU10 391^0 -4^0 394^6 391^0 1038

Early Opening Calls: off 2-4 cents

Top News -- CONAB estimated the 09/10 Brazil Corn crop at 51.38 mln mt up just slightly from the prior month's estimate of 51.36 mln mt -- IBGE of Brazil estimates total 2010 Corn crop at 52.4 mln mt, up 1.8% from January's estimate -- Uruguay was reported seller of 23,000 mt of Corn to unknown EU destination on Tuesday, acc. to traders. -- News reports out of Jordan citing the country's finance minister as suggesting the gov't has borrowed $100 mln for Wheat & Barley trade finance. Wheat stockpiles were also reported at 650,000 mt enough to cover 11 months worth demand -- Monday's USDA Weekly Corn Inspections: 34.077 mln bu ; expected 33.5 mln bu -- MARCH 2010 CORN FUTURES 3/8/10 : 1,179 contracts -- Pending Tender: Mar 19th is date set for Japanese SBS tender, they’re also seeking a total of 11,000 mt of Barley, acc. to ag ministry official. 9,000 mt will be for Barley malting -- Dalian Sep Corn futures traded and ended 4 higher at 1,869 yuan/mt -- Liffe June corn futures were off -1.00 euro at 133.00 euros/mt. -- Globex Corn Vol: 132,504; Pit Vol: 12,919; Open Interest change: - 300 -- Weather: 6 - 10 Day Forecast: Normal to Above Temps West, Below East. Below Normal Precip. -- Outside markets: Energy Complex -1.54 at $80.33; Gold & Silver: -12.1 at $1111.9 & -0.332 at $16.940; US $ +0.385 at $80.840

Cash Markets -- CIF Corn steady off 1. Mar. +34 to +37, April +36 to +38, May +39 to +41, June +35 to +38, July +39 to +42, Oct. +41 to +44, Nov. +41 to +44, Jan. +36 to +38

TREND:

Special note on corn options today. One clearing firm bought 4,000 CZ 5.00 calls at 17 to 18 ½ cents. This tended to firm opt volatility. If this is short covering, will take off about 25 pct of the open interest on this strike?

The corn had a hard time doing much to down side or up side. It should start to accelerate the weakness for a test of 3.60. Corn should continue to gain on wheat. Deferred spreads should continue to weaken and widen.

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