The following market analysis is for the week ending Dec. 24.

CORN — Before we begin, I’d like to wish everyone a healthy, happy and prosperous new year! The holiday-shortened trading week didn’t have much to offer in the way of fresh news or insight. The week was even shorter for those federal employees in Washington, D.C., who had a “snow day” on Monday.

Market participants are still concerned about index rebalancing, which would involve buying corn, sometime after the first of the year.

Harvest has come to a standstill with recent weather events, and traders estimate that 650 million bushels of corn are yet to be harvested. What will the quality be when/if it is combined?

Demand has been lagging, but this week’s export sales were surprisingly strong at nearly 63 million bushels, a marketing year high. We only need 34 million bushels per week to achieve the U.S. Department of Agriculture export projection of 2.05 billion bushels.

We are currently 17 percent ahead of last year on sales and the USDA is expecting sales for the year to be up 10 percent. The U.S. dollar has been firming up, which usually results in less interest in buying commodities.

All of these issues resulted in a mostly sideways trade to start out the week. However, mid-week the dollar began to fall and corn took advantage to climb back above the $4.00 level. March corn’s trading range of $3.80 to $4.15-$4.20 remains intact.

OUTLOOK: A short week, so just a short recap this week. The trading range for March corn remains in place from $3.80 to $4.15-$4.20. Corn sales from both commercials and growers are expected to pick up in the first quarter of next year due to quality concerns. Cold weather may delay movement, but most will want to pick up piles and core bins probably sooner than later.

From a day-to-day perspective, watch the U.S. dollar and fund activity. For longer term, also be alert for acreage estimates for next year and whether corn will have to fight for acres. This week, March corn was up 10 3/4 cents at $4.08 1/2 and December 2010 corn was up a dime at $4.40 1/4.

SOYBEANS — After posting double-digit losses for four days and touching their lowest level in over a month, soybeans were able to muster a double-digit gain at mid-week. Favorable South American weather, fund selling and a firmer U.S. dollar were catalysts for losses, while new export sales and profit-taking in the U.S. dollar were cited as influences for the bounce.

When the dollar began to retreat, beans were able to ride the coattails to push back over $10 per bushel in the January contract. A new record for the November soybean crush lent a modicum of support at over 168 million bushels. However, balancing that number were larger-than-expected meal and oil stocks.

Export sales this week were again strong at almost 44 million bushels, keeping total sales 55 percent ahead of last year’s pace. Total sales are forecasted by the USDA to be up 5 percent this year, but sales later in the marketing should lag as South American supplies hit the market.

However, their crop is not yet in the bin and some level of support should be found in beans until the crop is assured. The fluctuations of the U.S. dollar will also continue to have an impact on market direction.

OUTLOOK: How much longer will China be in the market for U.S. beans? The answer to that question will pretty much determine where you think bean prices are headed in the near term.

For the time being, monitor South American weather and the U.S. dollar. For the March bean contract, the range is $9.60 to $10.75. This week March beans were down 12 cents and settled at $10.08. November 2010 beans were down 4 1/4 cents at $9.89 1/4.

Nystrom’s notes: Nearby contract changes for the week: Minneapolis wheat down 3 3/4 cents, Kansas City wheat down 2 3/4 cents, Chicago wheat down 3 1/2 cents, feeder and live cattle down 10, and hogs down $1.32. Changes for the week as of 12:45 p.m. Central Time, Dec. 24, crude oil up $3.33, heating oil up 8 cents, gasoline up 8.7 cents, natural gas down 12.7 cents, the U.S. dollar index up 0.02 points, the Dow up 191 points and gold down $4.80 per ounce. The Quarterly Grain Stocks report and the final 2009-10 Crop Production report will be released on Jan. 12.

Phyllis Nystrom is a market analyst with Country Hedging in St. Paul.