Corn exports started the year very slowly. Exports during the first quarter were 47 million bushels (10.4 percent) smaller than in the same quarter last year and at the lowest level in nine years.

The pace of exports accelerated a bit in December and January. As of Feb. 2, cumulative export inspections were nearly equal to those of a year earlier. As of Jan. 26, unshipped export sales were only 50 million bushels smaller than those of a year earlier. Shipments and sales appear to be on a pace to exceed the USDA projection of 1.65 billion bushels for the year.

Good noted that export prospects might be further enhanced by expectations for further reductions in the projected size of the upcoming Argentine harvest.

"The USDA reduced that forecast by 120 million bushels (10 percent) last month. Trade reports about the size of further reductions are in a wide range, but center on about 150 million bushels.

“Add in uncertainty about Chinese demand, the ongoing drought in parts of Mexico, and the likely implications of possible freeze damage to wheat crops in eastern Europe and the Ukraine and the U.S export picture becomes murkier," he explained.

While uncertain, the level of year- ending U.S. corn stocks will be small, increasing the importance of the size of the 2012 crop.

Production expectations begin with planted acreage. Corn acreage is generally expected to increase by 2 to 3 million acres due to prospects for less prevented plantings and the relatively high price of corn. Area harvested for grain, then, could increase by 3 to 4 million acres.

The default yield expectation centers on trend value, but there are widely differing opinions about trend value. Good believes that "deviation from trend will depend on planting and growing season weather.

“Current concerns center on soil moisture deficits in the southern Plains, in the Southeast, and more recently in western Iowa and southern Minnesota. While probabilities favor a much larger corn crop in 2012, the likely production will remain unknown for several more months."

The mixed fundamental picture for corn results in a wide range of price expectations and complicates marketing decisions for producers. This type of environment favors spreading sales of remaining old-crop inventories over the next few months. For now it appears that the recent wide trading range (about $5.75 to $6.75 for March futures) will persist, with prices in the upper part of the range providing opportunities for incremental sales.