Price action: Corn futures benefited from funds covering short positions, as well as spillover from soybeans to close 3 1/2 to 4 1/4 cents higher. Funds were the net buyers of 5,000 contracts (25 million bu.) today.
Fundamental outlook: With funds still heavily short the market, there is more room to the upside for a corrective rally. But rally attempts have been met with selling in the past. Traders remain concerned that China will cancel additional corn shipments due to presence of unapproved GMO material.
But in the meantime, other countries continue to buy U.S. corn that is considered a "value." This morning, USDA announced Japan purchased 278,384 MT of U.S. corn for 2014-15 delivery. Additionally, a one-cent gain in Gulf basis this morning signals additional demand news is on the horizon.
Technical outlook: March corn futures finished off the session high but still closed above yesterday's high of $4.26 1/2. Futures need closes above the December high of $4.40 3/4 to signal a near-term low is in the works. Contract-low support lies at the December low of $4.18 1/2.
Hedgers: 25% of 2013-crop production is sold via cash forward contract for harvest delivery.
Cash-only marketers: 25% of expected 2013-crop production is sold via forward contract for harvest delivery.
Price action: Soybean futures faced pressure overnight, but the market trimmed losses and then turned higher with the start of the day trading session. January through August futures ended high-range with gains of 8 3/4 to 9 1/2 cents, while deferred months saw lighter gains.
Fundamental outlook: The soybean market benefited from forecasts for high temps in Brazil and Argentina, which could stress the developing crop. The market also retraced some of its recent losses amid ideas reactions to talk China will cancel soybean orders once South American supplies come available were overdone. While China has front-loaded its U.S. bean buys, South America has had plenty of issues getting a normal bean crop shipped in the recent past, let alone a record-setting one.
Spillover from corn and a pullback in the U.S. dollar index around midday added support. Funds bought 7,000 soybean contracts (35 million bu.) today.
Technical outlook: January soybean futures tested but settled just shy of psychological resistance at $13.50 today. The next level of resistance is the December high of $13.53 1/2. Support is layered from last week's low of $13.12 1/4 to the psychological $13.00 mark.
Hedgers: Get to 100% sold in the cash market on 2013-crop production. We'll manage risk on the board the remainder of the marketing year.
Cash-only marketers: Get to 75% sold on 2013-crop production.
Price action: Wheat futures saw two-sided trade today, but bears had control heading into the close. SRW wheat ended roughly 1 to 2 cents lower, while HRW and HRS wheat saw losses ranging from 3 to 5 cents. This was a low-range close for most contracts.
Fundamental outlook: Wheat futures initially benefited from some corrective short-covering on concerns about another blast of cold air slated to hit the Plains this week with snowcover in the region having recently eroded. Gains in the corn market added spillover support.
But this eventually gave way to selling amid reminders of tepid demand for U.S. wheat. Egypt purchased wheat from Romania and Russia today. And Iran bought wheat from Mexico and the Baltic Sea region. These sales reminds of ample global supplies of wheat.
Technical outlook: March SRW wheat futures hit yet another contract low today. The next level of support is the June 2012 low of $6.07 1/2 on the weekly continuation chart, followed by the psychologically significant $6.00 level.
Hedgers: 75% sold on 2013-crop in the cash market. No 2014-crop sales are advised.
Cash-only marketers: 50% sold on 2013-crop. No 2014-crop sales are advised at this time.
Price action: After a firmer start, cotton futures drifted lower as funds began to take profits out of the market as they worked to even positions ahead of the holidays. Futures posted losses of 39 to 54 points, with nearbys leading losses.
Fundamental outlook: Some profit-taking was seen in the market today following recent gains. With little fresh news for the market to digest today, traders focused on evening positions. More of the same is expected the remainder of the week as traders continue to lighten their exposure to the market ahead of the holidays.
Key for price action tomorrow will be position squaring ahead of the Federal Reserve's announcement about its policy measures. Traders largely expect the Fed to announce how it will begin to taper its aggressive bond-buying program.
Technical outlook: March cotton futures posted a new-for-the-move high of 83.72 cents today but ended near session lows. No technical chart damage was done, in fact, today's higher high is a positive technical signal and points to a potential move to the 85.00-cent level.
Tough support stands at the June low of 81.64 cents.
Hedgers: 50% of expected 2013-crop is sold in the cash market.
Cash-only marketers: 50% sold on 2013-crop production.