Price action: September corn ended 3 cents higher, with December through September futures ending 3/4 to 1 1/4 cents lower. Far deferred futures ended narrowly mixed.
Fundamental analysis: Bull spreading was seen amid tight supplies, although Gulf basis slipped 15 cents this morning for immediate delivery to reflect softening demand. Early pressure on new-crop futures came from the slight improvement in the crop condition ratings, as well as favorable weather. But the pace of the decline was light in comparison to double-digit losses in soybean futures due to spread unwinding.
Traders are also focused on evening positions ahead of Monday's USDA Crop Production Report. Traders are formulating their best guess of USDA's yield projection and most expect at least some uptick in the yield given the improvement in crop condition ratings last month.
Technical analysis: The technical outlook for December corn futures continues to deteriorate, as futures posted a new-for the-move low of $4.55 before finishing well off the daily low. To signal a near-term low is in the works, the contract needs to return at least above the early July low of $4.90.
Hedgers: 100% sold on 2012-crop in the cash market. 25% of expected 2013-crop production is sold via cash forward contract for harvest delivery.
Cash-only marketers: 100% sold on old-crop. 25% of expected 2013-crop production is sold via forward contract for harvest delivery.
Price action: Soybean futures extended losses into the close to finish 14 to 16 cents lower in new-crop contracts. August beans ended 5 1/2 cents lower. Meal and soyoil also closed with sharp losses.
Fundamental analysis: Futures were pressured by the perception that weather is ideal for pod-filling soybeans. Forecasts for below-normal temps and waves of showers over the Midwest over the next week have traders looking for next week's crop condition report to show more improvement in the ratings.
Traders ignored USDA's announcement that China purchased 110,000 MT of U.S. beans for 2013-14, as their focus is on the growing supply outlook and not the strong demand base.
Technical analysis: November soybean futures posted a new-for-the-move low of $11.65 1/4, making that level initial support. Bears' next target is the June low of $11.40. Initial resistance is old support at the April low of $11.86 1/2.
Hedgers: 100% sold on 2012-crop in the cash market. 20% forward priced on expected 2013-crop production for harvest delivery.
Cash-only marketers: 100% sold on old-crop. 20% of expected 2013-crop production is sold via forward contract for harvest delivery.
Price action: Wheat futures were choppy today, but were supported in late trade by short-covering to end mostly 5 to 6 cents higher.
Fundamental analysis: Early pressure stemmed from spillover from neighboring pits, as well as news that Egypt snubbed the U.S. in its latest tender and purchased 60,000 MT of Romanian and 60,000 MT of Ukrainian wheat. Also, news that Iraq has purchased 150,000 MT of Australian and 50,000 MT of Canadian wheat raised concern that U.S. wheat is losing its competitive edge. Traders are also digesting news of "better-than-expected" harvest results in the EU, particularly in France where harvest is about half complete.
Some support came from the decline in the spring wheat crop condition ratings, but the bulk of late-session gains came on short-covering. Key tomorrow will be if wheat can build on today's high-range close, especially if corn and soybean futures remain under pressure.
Technical analysis: December Chicago wheat futures posted an inside day up on the daily chart. The contract still has a lot of work ahead in order to signal a near-term low has been posted. It's first obstacle is last week's high of $6.79 3/4, followed by the July high of $7.05 3/4. Contract-low support is just beneath current prices at $6.54.
Hedgers: 50% of 2013-crop is sold in the cash market. 100% sold on of 2012-crop.
Cash-only marketers: 25% of 2013-crop is sold. 100% sold on 2012-crop.
Price action: Cotton futures got off to a choppy start, but firmed into the close to finish 42 to 56 points higher, which was good for a high-range close.
Fundamental analysis: Cotton futures were supported by concerns about crop development. Yesterday's progress data showed 53% of the crop had set bolls as of Aug. 4, which compares to 39% the previous week, but lags the five-year average of 70%. While Arizona's crop is more advanced than the average pace, the Texas crop is twenty percentage points behind the average pace at 42% of bolls set.
Otherwise, there was little fresh news for the market to digest, which could result in some profit-taking pressure tomorrow morning.
Technical analysis: December cotton futures remain confined within the boundaries of the long-lasting consolidation range. The July trading boundaries outline resistance at 87.11 cents and support at 83.58 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 2012-crop in the cash market.
Cash-only marketers: 50% of expected 2013-crop production is sold via cash forward contract for harvest delivery. 100% sold on 2012-crop.