Morning Call by Bryce Knorr

Futures look ready for a softer open this morning, after selling emerged in Europe overnight on concerns the economy there is weakening, despite this week's deal on a new bailout for Greece.

Corn should start the session lower on follow-through selling from Tuesday's decline. March corn slipped below its 50-day moving average around $6.285, with last week's lows coming in at $6.2175 for downside support.

Volume jumped 30% on Tuesday to 422,785, according to the preliminary report from the CBOT, as traders returned from the three-day weekend. Open interest was off 3,077 with funds selling around 12,00 lots. Traders continued to liquidate calls ahead of March options expiration on Friday, with the $6.50 strike most active. Heavy put liquidation was also seen both in and out of the money.

CIF basis at the Gulf is down 11 cents from last week's high, though there's still nothing registered for delivery with first notice day looming at the end of the month. USDA announced the sale of 4.4 million bushels of old crop corn to unknown destinations under its daily reporting system for large purchases.

Export Inspections in the latest week came in at 34.8 million bushels, at the top end of trade guesses, including 2.531 million bushels off the PNW bound for China.

Corn futures on the Dalian exchange in China fell .21% today, while prices in Europe in morning trade gained .36%.

Outside markets are holding back attempts to recover today, pressured by a stronger dollar. Purchasing managers indexes released across the Eurozone this morning reinforced ideas the region is slipping closer to recession, with signs of weakening also noted in China on lower export orders. Those stories took the edge off the rally in crude oil, which topped $106 on escalating tensions with Iran, hitting its highest level since last May's seasonal peak.

Here in the U.S. Wall Street could see light selling on the open after yesterday's test of 13,000 on the Dow. The flow of economic data in the U.S. remains slow. The Chicago Fed National Activity Index showed slowing growth in January, while Existing Home Sales for January are expected to post only slight improvement.

Soybeans could lead the market lower, with light profit taking emerging overnight. Downside trendline support doesn't coming in until $12.52 today, giving the market plenty of leeway.

Northern Argentina and southern Brazil saw good rains in the last 24 hours, with scattered showers forecast into next week for dry Brazilian fields. Overall the latest American weather model maps for South America look wetter than yesterday, though much of the rain it predict toward the end of the period. Temperatures are noticeably cooler today.

Export inspections hit 38.4 million bushels in the latest week, at the top end of trade guesses. Taiwan filled a tender for 2.1 million bushels from Brazil, but most of the new remains positive for U.S. sales. USDA confirmed the sale of another 9.2 million bushels of new crop to China, likely part of the trade deals reached last week. China took 68% of the week's 38.4 million bushels inspected as well.

Volume in soybeans rose more than 20% Tuesday to 207,934, though open interest was off 3,936. Volume in soybean oil also picked up, with open interest rising 6,644 there on fund buying.

Vegetable oil prices in Asia moved lower today, led by futures on Malaysian palm oil, which lost .55%, while soybean oil on the Dalian exchange in China edged fractionally lower. Soybeans in China were down .16% with rapeseed in early European trade this morning slightly lower.

Wheat could also see a weaker open today, following the generally bearish mood. March futures failed to hold a move above February trendline resistance yesterday, with Kansas City overnight holding yesterday's lows.

The world news flow for wheat remains fairly active. While Ukraine's ag minister said the country was not banning exports, he forecast 2012 wheat production between 550 and 590 million bushels, down from the 800 million produced in 2011. That suggests only minimal sales from the Black Sea producer after last fall's drought and a severe winter. However, a Russian farm lobbying group said there had been only minimal damage there, with the country likely to maintain exports around 800 million bushels. Russia's ag minister said there would be no ban on exports as well.

Saudi Arabia filled a tender for 12.1 million bushels of hard wheat from the U.S. Canada, Australia and the EU, while yesterday's export inspections beat expectations at 22.2 million bushels.

Volume in Chicago rose 26% to 127,246, while open interest was up 5,574 on modest fund selling. Futures on milling quality wheat in Europe are up .35% in morning trade.

State Crop Reports for Texas showed ratings improving again this week, adding another half bushel per acre to yield potential. Storms are light this morning, with two more systems expected to mostly help northern Plains wheat areas over the next week, though the latest five-day coverage map sees only modest amounts.

Official 6- to 10 and 8- to 14-day forecasts out yesterday remain dry for hard red winter wheat areas, but

overnight maps show a good storm moving through spring wheat areas Sunday and Monday. The latest American model isn't as aggressive with moisture totals, however.