Price action: Corn futures closed narrowly mixed and near their daily highs. March futures closed unchanged after trading as much as 6 cents lower. The December contract led gains, finishing 1 1/4 cents higher.
Fundamental analysis: Corn futures opened on the defensive on news China rejected another cargo of U.S. corn due to detection of an unapproved GMO product. However, reports surfaced that the cargoes involved have reportedly been resold to another Asian destination. The stronger U.S. dollar index also weighed on futures in early trading. A very positive export inspections report caught traders by surprise and traders trimmed early losses as futures failed to attract additional selling after testing 2013 lows. Corn export inspections came in at 35.661 million bu., up 5.4 million bu. from the previous week and above traders' expectations.
Technical analysis: March corn futures traded below their 2013 low of $4.24 and then edged higher after failing to uncover sell stops resting below the $4.20 mark. There is hefty resistance at $4.30. Traders covered short positions when the dip below former 2013 lows failed to attract additional selling.
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 enjoyed followthrough buying overnight, but this gave way to profit-taking this morning and futures ended low-range with losses of 4 1/4 to 15 1/4 cents through the September contract, with nearbys leading to the downside. Far deferred months ended around 3 cents higher.
Fundamental analysis: Funds focused on booking profits to start the month of December, as the soybean market has recently enjoyed strong gains. Strength in the U.S. dollar index and the lack of a daily sales announcement added incentive for traders to do so.
Also, this morning's weekly soybean export inspections of 52.623 million bu. were a bit of a disappointment as the tally fell short of last week's tally and pre-report expectations. Favorable weather in South America added pressure.
Technical analysis: January soybeans posted a bearish reversal for the day, which gives bears the upper hand heading into the overnight session. The contract settled 1/4 cent below initial support at the Nov. 14 high of $13.21 1/2, after which support is tightly layered from the October high of $13.12 3/4 down to the psychological $13.00 level.
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 softened this morning and ultimately settled at or near session lows with losses mostly around 7 cents in the SRW market. HRW wheat moved well off its lows into the close to finish mostly around 3 cents lower. HRS wheat settled low-range with losses around 2 to 5 cents.
Fundamental analysis: Wheat futures enjoyed strong gains overnight, but this triggered a round of profit-taking this morning, which resulted in a number of contracts posting bearish reversals on the day. Spillover from the corn and soybean markets, along with a firmer U.S. dollar index added incentive to lighten long positions.
And while this morning's weekly export inspections tally of 15.5 million bu. met expectations, the figure failed to impress market participants, keeping demand concerns close at hand.
Technical analysis: March SRW wheat futures posted a bearish reversal on the day, which could set up a test of the bottom of the market's November trading range at $6.52. Violation of that support level would signal a test of the contract low at $6.47 3/4 is likely. Resistance remains around the summer triple top of $6.90.
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: Cotton futures faced pressure for much of the day and the market ended low-range with losses of 65 to 87 points on the day.
Fundamental analysis: A number of cotton contracts saw an inside day of trade as the market was lacking as to near-term price direction. A stronger U.S. dollar index and generally bearish attitudes across the grain markets gave bears the advantage today.
Meanwhile, China's domestic stockpiling efforts for 2013 remain below year-ago levels and the results of its initial auction of state reserves failed to impress. Nevertheless, traders are hesitant to add long positions until they have a better idea what impact this will have on the country's demand for U.S. cotton.
Technical analysis: March cotton futures spent the day within Friday's trading range, leaving resistance at the late-November high of 79.65 cents. Tough support stands at the November low of 76.65 cents.
Hedgers: 50% of expected 2013-crop is sold in the cash market.
Cash-only marketers: 50% sold on 2013-crop production.