2011 is a La Niña year, Freed notes, and projections are for dryness across most of the Northern Hemisphere, which will probably continue into spring. Rains in Australia and across the Southern Hemisphere could adversely affect their wheat crop and increase U.S. export demand. Concerns about cold weather in Russia and China and dryness in Argentina could also have an impact on U.S. exports if those countries don’t have good crops.

“Looking to the March-May time period, we’re concerned about the wet forecast for the Ohio River Valley — that could mean late corn planting. Beyond that, climatologists are concerned about the possibility of dry conditions from July through early September across the Midwest.”

Over the last 15 years, Freed notes, December corn has tended to make its high in the March-April period. “I think basis will tell us around April 1-15 just how tight the situation is relative to demand.

“Soybeans have already pushed through a lot of key price resistance levels, and the export demand could be a little better than the USDA is saying. Total usage trends continue to move higher, most of that due to export demand. The number of days of U.S. soybean stocks is at a record low versus demand. Technically speaking, we’re looking at much higher prices.”

Wheat is “something of the laggard” in the marketplace, he says. “The most important factor in wheat now is the condition of the crop in Kansas, one of the lowest we’ve seen. If the weather continues dry there, it could put a premium in the wheat market.