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Join AMS commodities analyst Rich Balvanz for early morning market comments on your local affiliate of the Iowa Agribusiness Radio Network.  Find your local affiliate by clicking the Broadcast Comments button at left.

Today's market headline items to take to the coffee shop this morning......

Good morning.  Corn is up 2 to down 1, soybeans are up 7 to 3 cents and wheat is up 2 cents.
 
Corn, soybean and wheat futures are higher this morning.  Most significantly, the rallies are occurring in the face of a soaring dollar and sharply lower crude oil futures.
 
The key impetus for higher US markets is the idea that China may be ready to buy larger quantities of US soybeans this quarter as drought is expected to cut the South American harvest and push both Brazilian and Argentine prices higher.   Recent strength in soybean Gulf basis values are another clue that demand for US soy is on the upswing.  But this development is also tied to unexpected congestion at South American ports that has made grain loading difficult and may direct some business toward the US in order to guarantee timely delivery.
 
South America’s weather forecast is drier and hotter than it was on Friday.  While crops have received beneficial moisture in recent weeks, a return to droughty conditions now could have further negative impact on later planted soybeans.
 
USDA will release monthly supply and demand updates on Thursday.  Traders will be closely watching for the extent of South American production losses USDA economists are willing to build into their balance sheets.  
 
 On Friday Informa Economics adjusted its forecasts as follows: Argentine corn 22.5 million MT (USDA 26 MMT); Brazil corn 61.6 million MT (USDA 61 MMT); Argentine soybeans 46.5 million MT (USDA 50.5 MMT); Brazil soybeans 70 million MT (USDA 74 MMT).
 
Russia’s announcement Friday that it will not restrict grain exports seemed to have little impact on the market.
 
China’s farm trade deficit rose 47 percent in 2011 as its own production fell short of demand.  China imported $94.87 billion worth of farm products, with a trade deficit of $34.12 billion.  Imports of grains, cotton, sugar and livestock products all increased.  Sugar imports increased the most.  China topped Canada to become the number one market for US farm products in 2011.
 
The European debt crisis moved into a more critical stage today as fears grew that Greece would not accept the painful terms of a new bailout deal needed to avoid a potential debt default.   The heightened level of uncertainty was responsible for the sharp upward move in the dollar and fall in the euro.  The lower euro helped push Paris wheat futures to their highest level in eight months.
 
In early trade March crude oil is down $0.94 at $96.90 per barrel.  March gold is down $16.10 at $1722.80 per ounce.  March US dollar index futures are up 0.428 at 79.485.  March S&P 500 futures are down 4.50 at 1334.50.
 
South American Ag Weather Watch
 
1-2 Day Outlook:  Scattered showers and thundershowers will develop today and Tuesday across central and northern Argentina to Uruguay and parts of southern RGDS, Brazil. Rainfall totals of 0.20-1.00 inch (5-25 mm) are expected through these areas. Most of the remainder of the crop regions of Argentina to Brazil will see mainly dry weather with only a few light showers today and Tuesday. Temperatures will average near to above normal in most areas except above normal across northern Argentina to Paraguay.
 
3-5 Day Outlook: In Brazil, scattered light showers, locally heavier Wednesday through Friday except it turns drier across RGDS by Friday. Temperatures near to above normal. For Argentina, mostly dry or a few lingering showers across the north Wednesday, dry conditions Thursday and Friday. Temperatures average near to above normal.
 
6-10 Day Outlook: Temperatures are expected to average near to above normal in all areas with above normal readings for Paraguay and far northern Argentina at times. Rainfall is expected to average near to below normal.