March corn was 8 1/2 cents higher overnight. Crude oil made another new low and the dollar was higher overnight.

March corn traded near unchanged to end the day yesterday after an earlier rally failed to take out the previous day's highs. Prices were substantially lower overnight with traders crediting the weakness to a stronger dollar and lower crude oil. Traders said that ongoing weakness in feed demand in both the export and domestic markets is causing growing concern about the possibility of larger than expected ending stocks in corn for 2008/09. Export sales on last week's Export Sales Report ran at less than 1/2 the rate needed each week to reach the USDA projection and this is normally a time of year when sales are strong. Today's report will show sales through about one week ago, and traders do not expect a significant improvement due to ongoing competition from cheaper Brazilian corn and European feed wheat. Dry weather continues in the Midwest with most harvest areas expected to remain dry through this weekend. This should allow many farmers to complete their corn harvest. One analyst noted that this may begin to test US farmers' resolve to hold corn at current levels in anticipation of higher prices in 2009. China government officials indicate that they plan to buy as much as 5 million tonnes more corn on the domestic market to boost up state reserves in an effort to support local prices.

The beneficial reversal of weather patterns in Brazil that started about two weeks ago continues this week. Rain is expected in northern areas of Mato Grosso that are still a bit on the dry side, and welcome drier conditions continue to prevail in previously wet areas of the south and south central soybean and corn belts. In the US, cold air is expected to push down to the Ohio River Valley today with snow in Michigan and NE Ohio. Very cold air should remain through early Saturday along with dry conditions in most of the Plains and Midwest. Rain may push into the central Midwest to start next week. Jordan cancelled a tender for 50,000 tonnes of feed barley.