Coming back from Super Bowl weekend traders have nothing exciting beside the impending Greek debt default. This coupled to crude breaking hard should have agricultural markets on the defensive in spite of fading positive momentum from the overnight trade. All eyes are on European debt and the impact on the demand prospects for US commodities heading into the WASDE report this Thursday. There are weather concerns in Argentina, Brazil, South Africa, Ukraine and parts of Eastern Europe. The recent snow storm in the central plains has alleviated some early drought talk but we still have issues in the Dakotas and MN. There is little room for error if we want to plant 95 million acres without hammering the national yield. A report came out during the session on Friday from a private analyst stating we (the domestic producer) need to start with yield expectations closer to 155 bpa due to expanded acreage moving into marginal land. I guess âtrend lineâ yields are a thing of the past especially with corn on corn acreage taking a nosedive year after year. Informa came out during the session with lower estimates for all South American production. No shock to the trade but seeing numbers continually falling has helped budding momentum in beans. This is countered by reports from Argentina over the weekend stating recent rains have recharged soil moisture making early production numbers for beans more likely than the recent downside reductions. Western BA province has been the greatest recipient of rains in Argentina while Rio Grande De Sol has seen good rains during the pod filling stage. This could change estimates for the Brazilian crop dramatically so we will have to watch private forecasts heading into the USDA report. The trade is expecting a drop across the board from last monthâs production estimates but the question is, how much versus expectations? On the demand front, the US has a problem. Taiwan which is traditional US customer for both beans and corn skipped us over the weekend. This is a signal of further switches to South American shores due to a quickening harvest pace. AgroConsult stated 6% of the Brazilian crop is harvested versus 5% last year. A lack of major rains over the next week in Mato Grosse looks to pull more interest from US shores especially if coupled to the recent basis rally. The IMF estimates Chinese growth in 2012 at 8.25%. This is versus last yearâs early projections approaching 10%. In comparison it may not look that good this year but letâs not kid ourselves, 8.25% growth is phenomenal no matter what some analysts state. This bodes well for Chinese agricultural imports in 2012 but the question for the trade is where will it come from? Brazil and Argentina are going to eat into US demand as long as current currency considerations remain. I like China to import a massive amount this year of both corn and beans but I see much more coming from south of the equator than from US shores. The macro side heading into the WASDE report are leaning bearish with Iranian tensions static in spite of Ayatollah stating Muslims should âeradicateâ Israel. This is nothing new but it seems like a matter of time until one of Iranâs growing supplies of missiles is âmisfiredâ. This will change the global landscape to a major degree so watching tensions here is imperative for long term position traders. If Israel throws the first punch the US is in a real tough spot. If Iran throws the first punch is gloves off and airstrikes on. Also watch EU debt talk with growing concern over Portugal and Spain with Greek default an almost foregone conclusion. Itâs a pathetic situation over there that looks to pull the Euro lower over the next couple months offering negative momentum to any budding agricultural momentum. Heading into the day session markets have mixed momentum after the close of the overnight. Corn and wheat look to open mixed to lower while beans look to start higher. Whether or not it can stay higher is yet to be seen but pressure from macros and improving weather prospects in South America should have bulls on the edge of their seats. I see a trend lower into the report on profit taking by weak longs in spite of budding technical momentum. Spreads should speak loudly this week due to the Goldman roll period starting on Tuesday. Overall look lower this week to start with nothing pressing that I can see on the demand side to help prospects heading into the WASDE report. I remain bullish corn long term due to South American problems coupled to early drought conditions in key domestic production states. I will look for spreads to be the biggest factor this week with macros dictating more momentum than fundamentals. Disclaimer: Past performance is not indicative of future results. 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