The price pattern for old-crop soybeans has been somewhat different than that for corn. Highs were established in early February and recent lows occurred in mid-March. Prices rallied into late March, but did not reach a new high, and have declined about $1 so far in April. A slow pace of domestic soybean consumption has been ongoing since November 2010. Soybean exports began the seasonal decline right on cue in March and new sales began to slow dramatically in early February. The USDA lowered the marketing year projection of both exports and domestic processing in the report released on April 8.

While the pace of consumption of corn and soybeans will continue to be very important, the market will also be closely monitoring prospects for longer-term commodity demand. Weakness in financial markets and concerns about the consumer impact of higher fuel and food prices raise concerns about the overall strength of commodity demand.

New-crop corn prices remain at a discount to old-crop prices, but have moved to new highs. In spite of some lofty expectations about the potential size of the 2011 harvest, there is concern that weather conditions through the end of the month will not favor rapid planting. In addition, some question whether all the intended corn acreage in the Dakotas will get planted. New-crop soybean prices are at a small premium to old-crop, in contrast to the large old-crop premiums that existed just six weeks ago. The reversal reflects the large South American crop and the slowdown in the consumption of U. S. soybeans.

The upcoming period of uncertainty about commodity demand, general economic prospects, and 2011 production prospects provide an environment for very erratic price movements.