(DTN) I had the opportunity to present a marketing year outlook at the Iowa Power Farming Show in Des Moines this week. Many farmers I talked to were upbeat, but were also concerned about future price direction. That brings us to the question: What will it take to turn the corn market around?

There is good reason for the pessimism shared by many, including myself, about the price outlook for corn. The market structure is bearish and growing more so by the week. Both the long-term and short-term trends are down, noncommercial traders are liquidating from their net-long futures position in large chunks weekly (well over 100,000 contracts in just the last two weeks alone) and futures spreads are strengthening, indicating underlying fundamentals are growing more bearish.

It will take a change to the market structure before futures can stabilize let alone rebound longer term. This will need to come from a shift in noncommercial mentality. But, more importantly, fundamentals need to become less bearish. And this is why there is hope.

Let's take a look at several places where fundamentals could turn a lot less bearish. As of Dec. 20, 5 percent of the corn crop remained in the field. Assuming USDA's projection for total production of 13.151 billion bushels is correct, approximately 657 million bushels were left standing. There has been some progress made since then, so we will err on the side of caution and say 450 mb are still in the field under snow. I've heard concerns from farmers of corn rotting on the stalk or collapsing under the weight of winter storms. It is hard to gauge how widespread this is, but Kansas State economists did an interesting study which showed that, under typical weather conditions, a loss of 10 to 20 percent is expected. Of course, we all know this is anything but a typical winter. Kansas State's expectations are for a 50 to 75 percent loss in many areas due to heavy snow cover. Assuming they are correct, let's once again be cautious and use a 50 percent loss on the remaining 450 mb. This means USDA's ending stocks estimate of 1.764 mb would fall to 1.539 bb, putting the stocks-to-use ratio at an extremely tight 11.8 percent, if demand remains at 13.07 bb.

DTN's Ag Weather team is predicting a third straight cool and wet spring for 2010. Early estimates are for approximately 90 million acres to be planted, roughly 3.5 ma more than last year. If this upcoming planting season is as challenging as 2009, look for noncommercial traders to take notice. Yes, last year's late plantings resulted in estimated record yields, which could temper some of their bullishness. However, a lot of fall tillage work was not accomplished, and over 3 million acres will need to be harvested before spring work can begin. Unfortunately, 2010 could put 2009 to shame in terms of challenges for some of you. This puts into question whether 90 ma will get planted.

Lower test weights mean lower quality. There has been a lot of talk from producers and elevators of corn going out of condition in the bin. This would be bearish in the near term as large quantities hit the market, leading to weaker basis levels and stronger carries in future spreads. Longer term, the higher-quality corn may be worth more as commercials try to meet their commitments.

Another factor that bears watching is demand. USDA's record-setting projection of 13.07 bb total demand will need to be met or eclipsed to keep traders from losing total confidence in this market. Questions abound over USDA's 2.05 bb exports projection and whether it can be met. However, the pace has picked up as the market fell into the lower third of its three-year price distribution range. Feed usage of 5.55 bb and ethanol demand of 4.2 bb is less questionable considering the recent price decline in corn. Also, job growth will play a key role in demand. If the economy can stabilize and jobs are created, consumers should drive more and return to eating more meat.

It's interesting to note that, in 2009, the dollar and commodities in general have a negative correlation of 99 percent. This is expected to continue into 2010. The dollar's recent uptrend has contributed to the downturn in corn due to noncommercial liquidation. There was talk off the floor this week of the Fed keeping interest rates in check into 2011. If true, the greenback could once again come under pressure and support corn.

Finally, it's possible USDA overstated production. If USDA makes large reductions to its 13.151 bb projection in future reports, noncommercial traders could resume building their net-long futures position, and a steep rally may ensue. However, until futures spreads weaken dramatically, the commercial side of the market will continue to offer little support.

It may take a combination of all these factors and some time to turn things around. At the very least, there are enough reasons to believe it may be a bit premature to print corn's obituary at this juncture.

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