December corn was 6 1/4 cents higher overnight. The dollar was sharply lower overnight and crude oil was sharply higher.

A limit down close in corn on Friday came in conjunction with another broad sell-off in stocks. Traders said that negative momentum was added by the USDA reports. This brought follow-through selling in the overnight session which started with new lows that took the December contract below 400. However, that break was followed by a sharp recovery to higher levels by the end of the overnight session. Traders credited the strength to sharp rallies in crude oil and overseas stock markets. A perfect storm of negative factors has taken corn sharply lower in recent weeks. While these negative factors have been topped off by the economic crisis, the big US corn crop, higher than expected yields on the USDA's report and prices that remain somewhat high in historic terms have all added momentum to the downside according to traders. The large fund positions and ongoing liquidation trend by investors is also a significant factor, and the market saw evidence of further heavy liquidation by funds on the latest Commitments of Traders Report for the week ending 10/07. Total net selling by funds added up to over 44,000 contracts. Of that amount, trend-following funds were sellers of more than 24,000 contracts and index funds were net sellers of over 20,000. The net position of the trend-followers is now just 16,570 contracts, and that position may have fallen even lower in the sessions since October 7th which are not included on the latest report. The USDA's Crop Production and Supply/Demand Reports out on Friday before the open pegged the US corn yield at 154 bushels per acre compared to 152.3 bushels per acre on the September report. A slight revision lower in planted area left US corn production at 12.200 billion bushels compared to 12.072 billion bushels last month. This was about 135 million bushels more than traders expected. Ending stocks were raised to 1.154 billion bushels compared to 1.018 billion bushels last month and beginning stocks were raised to 1.624 billion due to the jump already seen on the September Quarterly Stocks Report. Traders expected ending stocks near 1.13 billion. The USDA revised ethanol usage down by 100 million to 4 billion bushels and revised feed usage up by 150 million to 5.35 billion bushels. The bright spot in the report was world ending stocks which were adjusted lower to 107.7 million tonnes from 109.9 million last month and 122.9 million tonnes last year.

Rain is expected to move into the western and NW corn and soybean belts today and finish sweeping through to the eastern/southeastern growing areas by Wednesday. This should be followed by clear weather in most of the Midwest into the weekend. Cooler temperatures are expected this week with a warm up into the weekend. No new tenders reported.