The following market analysis is for the week ending March 26.

CORN — What the market giveth, the market taketh away ... and taketh away, and taketh away. After posting a 10-cent gain last week, May corn collapsed 18 1/4 cents lower this week to close at $3.56 1/4. This is the lowest level it has traded since early October. The December contract followed suit, down 18 cents at $3.85 1/2.

Economic issues lent pressure on and off throughout the week. Greece’s debt situation is now expected to need help from a combination of the International Monetary Fund and the European Union. This eroded confidence in the euro since they won’t be handling the problem themselves and resulted in a stronger U.S. dollar.

A higher dollar makes our products and commodities more expensive to other countries, and thus is usually bearish to commodity prices. The U.S. dollar index is 1.78 points higher in two weeks, trading to levels not witnessed since last May.

Funds were seen exiting long positions throughout the week as the dollar firmed. Traditional funds and speculators are now estimated to have a fairly flat position in corn going into the U.S. Department of Agriculture reports March 31.

In a world where perception is reality, the perception that we’ll have delayed planting due to wet conditions is fading. Rivers have crested earlier and at lower levels than in recent years and forecasts are looking warmer and drier for the next few weeks. Poor ethanol margins have also exerted a negative influence on corn prices. Ethanol margins may have some positive hope as we enter driving season and demand is forecast to improve.

The Chicago Mercantile Exchange will launch the new Distillers Dried Grain futures contract on April 26. Twelve consecutive months will trade the 100-ton contract.

OUTLOOK: Direction hinges on whether this week’s reports will have any surprises, the pattern of the U.S. dollar, and fund activity. The average trade guesses for March 31 are as follows: planted acreage 88.941 million acres versus 86.5 million last year; range of guesses runs from 87.0 to 90.15 million acres. Corn stocks are estimated at 7.496 billion bushels with estimates ranging from 7.318 to 7.758 billion bushels.

Historically, trade estimates are usually higher than the actual March acreage figure and lower than the USDA March stocks number. With reports of fieldwork beginning around the Midwest and weather cooperating, we’ll need bullish news to keep us above $3.30-$3.25 basis the May contract. However, U.S. corn is a discount to South America into Asian destinations, which could attract buyers on dips.

SOYBEANS — Soybean prices slipped lower this week, but they did not totally wipe out last week’s 36-cent gain. The May soybean contract closed at $9.52, down 9 3/4; the November contract was 24 cents lower at $9.18.

Harvest in South America moved forward in spite of Argentine dock workers blockading two ports. Negotiations between the workers and exporters are expected to be resolved soon to allow business to return to normal. Argentina’s bean harvest was pegged on March 26 at 8 1/2 percent complete versus 14 percent last year. Brazil’s harvest is 66 percent complete versus 47 percent on average, according to Safras.

Soybeans were under the same negative influences as the corn, so we won’t rehash them here. The average trade guess for 2010 planted soybean acreage is a record 78.55 million acres with a range of estimates from 77.43 million to 79.5 million acres.

Last year we planted 77.5 million acres. The average grain stocks on hand as of March 1 are predicted to be 1.2 billion bushels, ranging from 1.147 billion to 1.279 billion bushels, according to a Bloomberg survey. If the average projection is realized, it will be the smallest number of bean stocks on March 1 since 2004. Historically, the USDA acreage number in March is usually above expectations. Trade stocks estimates have been lower than the actual USDA on March number in 3 of the last 7 reports, but the USDA has been below trade estimates in 10 of the last 14 years.

OUTLOOK: We’ll leave support in the May bean contract at $9.22 ahead of the report. First resistance comes in at $9.78. Then we’ll look to what the stocks and acreage actually were and if labor problems in South America spread. In the bigger picture, South America isn’t having significant harvest problem and we should see our exports sharply decline in coming months, plus carryout estimates for next year are already running from 300 to 637 million bushels versus 190 million bushels this year. It’s getting difficult to build a bright price picture.

Nystrom’s notes: Nearby contract changes for the week as of March 26: Minneapolis wheat was down 14 1/4 cents, Chicago declined 19 cents, and Kansas City wheat fell 16 1/4 cents. Crude oil this week dropped 97 cents to $80.68 for the week, heating oil was about unchanged, gasoline lost 4.8 cents, and natural gas plummeted over 29 cents to new contract lows. The Dow jumped 108 points, gold fell $0.60 per ounce, and the U.S. dollar index was up 0.89 points again this week at 81.61. The USDA Grain Stocks as of March 1 and the Prospective Planting reports will be released March 31 at 7:30 a.m. Central.

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