Excessive volatility is the only sure thing about corn and soybean prices, says Richard Brock, president of Brock & Associates and market analyst for Corn & Soybean Digest.

“Of course, weather will play a major part in determining prices,” says Brock. “But the value of the dollar, the overall world economy, energy prices and ethanol will also be major factors.

“I expect corn demand for ethanol to increase and I see a strong Chinese protein demand that can mean more U.S. sales of soybeans and corn there. The Chinese demand for DDGs (dry distillers grains) is a big sleeper for 2011.”

Brock doesn’t think the world recession is over. “If the U.S. dollar continues to plummet and foreign countries quit buying the dollar, the impact could be quite negative here but also on China, leading to one more leg down in the world economic crisis. “This could cut demand considerably and be negative on prices. All of these indicate that the volatility will remain excessively high.”