Although 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, he noted.
"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," he said.
In addition, some question whether all the intended corn acreage in the Dakotas will get planted, he said.
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, Good said.
"The upcoming period of uncertainty about commodity demand, general economic prospects and 2011 production prospects provide an environment for very erratic price movements," he added.