The soybean market traded lower on the decline in corn. The market found good underlying support on ideas that producers are switching significant acreage from soybeans to corn and soybean acreage to HRS wheat, on Agroconsult's reduced estimate for Brazil's soybean production and on further strength in the Brazilian real that continues to slow producer selling.

Agroconsult lowered their estimate of Brazil's soybean production to 53.5 mmt's vs.the Brazilian govt's estimate of 55.7 mmt's and USDA's estimate of 57.0 mmt's. Dryness during December, reduced fertilizer use and Asian rust appear to have all contributed to the lower than expected harvest yield results.

The trade is beginning to fear a significant acreage shift from soybeans to corn, especially if a dry pattern for corn planting occurs during the last half of April to allow timely corn planting. New crop corn futures are at a sufficient level to attract a big acreage shift from soybeans to corn, as long as planting is not delayed into May. Very favorable weather conditions could still result in a 2-3 million acre shift out of soybeans from the intentions figure. This should be supportive for new crop soybeans, but will not help the burdensome old crops soybean carryout situation.

The corn market closed lower on forecasts for favorable weather for US corn planting over the southern half of the Corn belt and on ideas there will be significant switching from soybeans to corn due to the high price of CZ. There continue to be unconfirmed rumors that China may soon make additional corn export sales as their domestic prices have weakened. It is hard to say what China's corn situation is at this time.

We like some seasonal spreads in here. The first one is buying July Kansas City Wheat and selling July Corn. The initial margin on this is $1300.00Also we like buying July Kansas City Wheat and selling Chicago wheat. These are long-term trades that should be fairly conservative. We feel there is some more upside potential