Advice: Cash-only marketers were advised this morning to sell 15% of 2012-crop to trim old-crop gambling stocks to 10%. Hedgers and cash-only marketers were advised this morning to sell 15% of expected 2013-crop production via cash forward contract for harvest delivery to get to 25% forward sold on new-crop.
Price action: Corn futures were pressured by strength in the dollar index, which created a "risk-off" attitude for much of the commodity complex today. But the market found some footing by late morning which trimmed losses. Futures posted an inside day and closed mid-range. Funds reportedly sold 12,000 contracts (60 million bu.) today.
Fundamental analysis: The primary fundamental news is the sharp upswing in the dollar, which has traders worrying about export sales. Today's Weekly Export Sales Report showed sales at only of 133,400 MT for 2012-13 and 77,100 MT for 2013-14. The figures came in at the low end of light expectations and reaffirm ideas of weak export demand. Additionally, warmer temps across the Midwest has traders looking for improving growing conditions as it accelerates crop development.
Technical analysis: Futures posted an inside day and closed mid-range. The July contract has immediate resistance at $6.83 1/2, yesterday's high, and support at $6.65 1/4, yesterday's low. If yesterday's high is taken out, the $7.15 area is the next level of resistance. If yesterday's low is taken out, there is a 20-cent deep area of support down to $6.40.
December corn futures also posted an inside day and a mid-range close. There is resistance at the $5.70 area and support at the $5.50 area. If the June high of $5.73 3/4 is exceeded, the $5.96 1/2 area is the next resistance area. There is a 20-cent deep area of support resting under $5.45.
Hedgers: NEW ADVICE: Sell 15% of expected 2013-crop production via cash forward contract for harvest delivery to get to 25% forward sold on new-crop. 100% sold on 2012-crop in the cash market.
Cash-only marketers: NEW ADVICE: Sell 15% of expected 2013-crop production via cash forward contract for harvest delivery to get to 25% forward sold on new-crop. Sell 15% of 2012-crop to get to 90% sold.
Price action: Soybean futures closed near session lows to finish 25 1/2 to 33 1/4 cents lower, with 2014 contracts leading losses. Funds were sellers of 7,000 contracts (35 million bushels). Meal and soyoil saw sharp spillover pressure.
Fundamental analysis: Following yesterday's strong gains futures were vulnerable to profit-taking, which was heightened by sharp strength in the U.S. dollar index that triggered widespread selling in the commodity world. If soybean futures see followthrough pressure tomorrow it would provide a hint that near-term highs have been posted, depending on the amount of price pressure.
Adding to the negative tone was this morning's weekly export sales data, as it showed soybean sales of 52,600 MT for 2012-13 and 108,500 MT for 2013-14 -- falling well short of expectations.
Technical analysis: November soybean futures posted a slight downside day of trade on the daily chart but respected support at this week's low of $12.77 1/2. Slipping below this support could trigger a wave of sell stops. Resistance stands at last week's high of $13.33.
Hedgers: 100% sold on 2012-crop in the cash market. 20% forward priced on expected 2013-crop production for harvest delivery. 50% of expected 2013-crop production is hedged in November soybean futures at $12.19.
Cash-only marketers: 90% sold on 2012-crop. 20% forward priced on expected 2013-crop production for harvest delivery.
Price action: Wheat futures favored a weaker tone throughout the day, but saw mixed trade around midday. Chicago futures ended 6 to 9 cents lower, with Kansas City down mostly 2 to 3 cents. Minneapolis wheat ended the day mixed.
Fundamental analysis: Much of today's pressure came on spillover from sharp losses in neighboring pits and sharp strength in the dollar index. Currency traders continue to react to yesterday's comments from Fed Chairman Ben Bernanke that signals easy monetary policy could be scaled back.
Wheat futures found some support around midday from U.S. crop concerns, namely expectations not all intended spring wheat acres will be planted and disappointing HRW wheat harvest results. But without widespread commodity buying, bulls were not able to maintain their footing.
This morning's weekly export sales data was termed neutral, as it showed sales of 432,700 MT for 2013-14 and sales of 2,000 MT for 2014-15 -- meeting expectations.
Technical analysis: September Chicago wheat futures posted an inside day of trade on the daily chart and ended mid-range. The contract needs closes above the June high of $7.24 to signal a near-term low is in the works, but it would take closes above the March high of $7.46 3/4 to confirm a low is in place. Contract low support lies a $6.73 3/4.
Hedgers: 100% sold on 2012-crop in the cash market. No 2013-crop sales advised yet.
Cash-only marketers: 100% sold on 2012-crop. No 2013-crop sales advised yet.
Price action: Negative outside markets weighed on cotton futures throughout the day, with contracts posting anywhere from a mid- to low-range close. Cotton ended 105 to 137 points lower, with May and July 2014 contracts leading losses.
Fundamental analysis: Sharp strength in the U.S. dollar index weighed heavily on the commodity sector today, which spilled over into the cotton market. With crude oil and gold futures sharply lower, as well as soybean futures, cotton bulls didn't have any staying power today.
Adding to the negative tone was a disappointing weekly export sales tally of 69,800 running bales for 2012-13 -- down 31% from last week. Sales of 81,400 running bales were better, although this did not support new-crop futures.
Technical analysis: December cotton futures posted a downside day of trade on the daily chart and ended mid-range. The contract has completed a 25% retracement of the rally from the November low to the June high, making the next key level of support the 38% retracement around 83.70 cents. Resistance is at the June high of 89.56 cents.
Hedgers: 50% of expected 2013-crop production is hedged in December cotton futures at 83.87 cents. 50% of expected 2013-crop production is also sold via cash forward contract for harvest delivery. 100% sold on old-crop in the cash market.
Cash-only marketers: 85% sold on old-crop. 50% of expected 2013-crop production is sold via cash forward contract for harvest delivery.