Commodities Bubble Burst? Big Clue Comes Next Week

Despite a record corn planting last year, there was only a slight increase in carryover — the amount that's left over from the previous harvest — to the spring. Should corn production drop this year, that could make supplies very tight and become a bullish indicator for prices. The same thing goes for wheat and soybeans, both of which also saw low carryover rates, attributable to surging demand from emerging markets across the world.

Analyst estimates for this year's plantings vary significantly, from Brees' FAPRI estimate of 91.8 million acres of corn down to some estimates as low as 88 million. FAPRI estimates 69.5 million for soybeans -- up considerably from last year's 61.7 million -- but the range runs from 71.8 million to 69 million. Wheat has a smaller estimated range, from 61 million to 64 million.

There's a general feeling that this will be one of the toughest years to get an actual read on plantings until the USDA releases actual numbers in June.

"This is probably going to be the least accurate of any planting intentions survey," said Elaine Kub, an analyst at DTN consultants in Omaha, Neb. "There should be accuracy here, but this year they're just not going to be very accurate and there's nothing you can do about it.

"You ask somebody what they're going to do now, and that could entirely change depending on what the weather is going to be."

Still, few analysts are ready to call an end to the bull market in agriculture, despite looming volatility and prices that fell sharply downward last week.

"I would not call the long-term trend over by any means. This very recent weakness that we've seen was more a function of speculators getting washed out," Kub said. "The entire market is not a bubble. There was just a part of it that needed to get washed out. The fundamental trends ... they're still in place."