The following market analysis is for the week ending Dec. 1.

SOYBEANS — The uptrend in beans stuttered this week, but regained its footing as a follower of corn.

Until the funds get rattled and exit agricultural commodities (possibly by rebalancing their positions by selling ag and buying energy), the lead soybean contract will eye $7 as an upside target. The road will be filled with curves to negotiate with the market willing to test trader’s perseverance at every turn. Translation: higher with setbacks.

Export sales continue to keep pace with expectations and are 42 percent higher than last year. This week’s sales were 26.8 million bushels.

Export sales in the products were a pleasant surprise with meal sales of 214,100 tons and soyoil exports at 31,500 tons. Both were better than expected and well above what is needed to achieve U.S. Department of Agriculture projections. China has appeared as the buyer of oil.

South American planting is progressing in a timely fashion in mostly good conditions. However, the weather situation in South America has been known to change quickly. We haven’t even begun to address any growing problems or rust. This may limit sellers’ activity until the crop is established.

Fund buying on the first day of the month is not as predictable as in corn, but since September 2005 the lead soybean contract has closed higher nine times and lower seven times. On Dec. 1 it closed lower.

OUTLOOK: Beans have not been as flamboyant as the corn, but their uptrend remains unbroken. Support in the January contract at $6.60-$6.70 is well below today’s values. On-going support from oil end-users, the need to maintain pace with corn to keep adequate acres and China’s appetite for beans will keep sellers cautious.

Seasonally, January beans trend higher for the first three weeks in December. The first target remains at $7.

CORN — Sometimes it feels like the market is just laughing at traders. Ha, Ha! You thought we were done going higher just because we had a small correction.

The correction however, didn’t come close to the moving averages that have been providing support, namely the 14- and 10-day moving averages. Markets don’t travel in vertical lines.

We will have dips and setbacks during an up-trending market, and that’s really what we experienced this week. The angle of ascent does seem to be slowing however.

There has been some speculation that index fund rebalancing will occur during the first half of December. This may involve selling agricultural commodities and buying energies. Until we actually see it happening, I won’t base my marketing plan on the talk.

Export sales continue to surpass pre-report estimates. This week sales were 40.2 million bushels, keeping us 35 percent ahead of last year. Based on these numbers, we aren’t seeing signs of rationing at these prices. Concerns over the promptness of Chinese exports have pushed some end-users to cover nearby needs in the United States.

Rationing is still being seen in the U.S. poultry market with egg set down for the sixth week in a row.

Fund buying did not extend their “habit” of buying on the first day of the month in enough volume to move the market higher. Since September 2005, the lead corn contract has closed higher on the first day of the month 11 times and lower only five times, including December 2006. It seems we may be closer to “seeing” what the index positions actually are.

The Commodity Futures Trading Commission reportedly may have a category breakdown of traditional and non-traditional hedgers. The non-traditional hedger includes the hedges against index fund commitment. The traditional hedger category would include hedges against the physical commodity or actions related to the physical commodity.

OUTLOOK: The corn market showed a small correction this week, but the attitude of “buy dips/only buy” has not disappeared. The mantra of “the market will tell us when it’s traded high enough” is flourishing.

Volumes are thinner than a few weeks ago, adding to the volatility and roller coaster effects. Money continues to rule the direction. I will not step in and try to predict a top level or when it might occur. For now, just embrace the fact that you’ll probably miss the top since the market is bigger than both of us, and it wants to go higher.

That said, you still need to determine how much risk you’re willing to take. Consider rewarding the market with some sales or at least protecting your downside for a portion of your crop.

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