Larger-than-expected beginning stocks in South America added some pressure on U.S. soybean prices recently. The information, which came out in USDA's February supply/demand estimate, released Feb. 8, "does not bode well for bulls in the bean market," said Terry Roggensack, market analyst with Hightower Research.

USDA lowered its estimate of U.S. soybean exports by 15 million bushels, lowered its estimate of crush by 10 million bushels, and increased its estimate of ending stocks by 25 million bushels - all of which caught the market off guard, according to the analyst. "We were anticipating a lower ending stocks figure for soybeans and now we have revision higher."

The lowering of U.S. exports comes despite a strong pace of soybean exports over the last few weeks. But USDA's forecast of higher beginning stocks for Brazil and Argentina offset any enthusiasm, according to Roggensack. "As a result, both countries have soybeans available for export at the tail end of their marketing year and can compete on the world market even earlier than anticipated."

Supply/demand estimates for corn were in line with most trade expectations, according to Roggensack. "The market anticipated about a 100 million-bushel decline in exports and a 15 million-bushel increase in industrial use, probably from improving ethanol numbers."

Over the next few months, the market will focus on acreage, according to James Rooney, market analyst with Rooney & Co., who cited the "77" rule. "Do we go from 74 million soybean acres to 77 million acres? And does the corn market go from 79.5 million acres down to 77 million acres?

"Nitrogen prices have also dropped about one-third since early December and that is a factor in regard to corn planting and fertilization."

But demand is still a very strong part of the equation for corn and soybeans, according to Rooney. "I think beans will push lower, $4 to $4.50, but I don't see them falling apart. You're going to see the demand part of the market become real. In corn, the question of whether we have a $2 or a $3 corn market depends on 2 million to 3 million acres of corn."

Lows ahead of the summer season could be $2.40 to $2.85 for December corn, according to Roggensack.

Rooney suggested that growers wait before doing any marketing and hedging this spring, "until we really get a feel for what we're going to plant on our acreage."

USDA projected soybean ending stocks at 345 million bushels, up from last month's estimate of 320 million bushels and up from last year's 290 million bushels.

The agency projected corn ending stocks at 1.89 billion bushels, up from last month's estimate of 1.806 billion bushels and up from last year's 1.71 billion bushels.

Wheat ending stocks were estimated at 839 million bushels, up from last month's estimate of 814 million bushels, but down from last year's 950 million bushels.