Price action: Corn futures finished mostly 7 to 10 3/4 cents lower, with old-crop contracts leading losses. The low-range close gives bears the upper hand heading into overnight trade.
Fundamental analysis: Early pressure was tied to sharp strength in the dollar index that created a risk-off atmosphere for the commodity sector. But additional pressure came from this morning's projections released by USDA Chief Economist Joseph Glauber at the USDA Agricultural Outlook Forum, which reflected his expectations for a sharp recovery in corn production in 2013 (see "Evening Report" for full details).
Adding to thoughts of a yield recovery was this morning's extended weather outlooks from the Climate Prediction Center that call for above-normal precip across the central Corn Belt next month that is expected to provide drought relief for Iowa, Minnesota and Missouri.
Gulf basis firmed a penny today to stand 64 cents above March futures to reflect the tight supply situation, although prices have fallen to levels that have spurred an increase in demand in the past.
Technical analysis: May corn futures violated support at last week's low of $6.85 1/2, making bears' next target the January low of $6.78 1/2. Violation of the latter level would open significant near-term downside risk.
Hedgers: 100% sold on 2012-crop in the cash market -- 10% for March 2013 delivery. No 2013-crop sales recommended yet.
Cash-only marketers: 75% sold on 2012-crop --10% for March 2013 delivery; 15% for May 2013 delivery. No 2013-crop sales recommended yet.
Price action: Soybean futures ended mixed. March and May futures closed 5 and 2 cents higher, respectively; July and August closed down 1 3/4 and 3 3/4 cents, respectively; and new-crop futures were 8 to 10 cents lower.
Fundamental analysis: Old-crop soybean futures favored a firmer tone in morning trade amid ongoing expectations the export window for U.S. soybeans could be open a bit longer due to shipping concerns in Brazil. Also supporting futures was USDA's announcement of a 130,450 MT soybean sale to unknown destinations split between the current and upcoming marketing years. Traders suspect the sale was to China, which adds to thoughts demand for U.S. beans could linger longer than expected.
Gulf soybean basis was 2 cents firmer for nearby delivery to stand 80 cents above March futures, adding to the bullish old-crop argument.
However, new-crop futures were pressured after USDA Chief Economist Joseph Glauber said he sees the potential for a sharp recovery in U.S. yields to produce a record crop of 3.405 billion bu. (see "Evening Report" for more).
Technical analysis: May soybean futures came within a penny of yesterday's high of $14.77 and posted a high-range close. The February high of $14.89 1/2 is bulls' next target. Support lies at last week's low of $13.93 1/2.
Hedgers: 100% sold on 2012-crop in the cash market. No futures/options positions at this time. No 2013-crop sales advised yet.
Cash-only marketers: 75% sold on 2012-crop production for harvest delivery. No 2013-crop sales advised yet.
Price action: Wheat futures sharply extended losses into the close to finish 16 1/4 to 21 1/4 cents lower in Chicago, mostly 19 to 20 cents lower in Kansas City and 13 to 16 3/4 cents lower in Minneapolis.
Fundamental analysis: Early pressure stemmed from sharp strength in the U.S. dollar index, but as corn futures softened, wheat extended losses. Additional pressure came from a better-than-expected precip event in the Central and Southern Plains, although the extended weather outlook calls for the drought to linger into spring to maintain stress on the HRW wheat crop.
Traders ignored indications of demand improvements. This morning USDA announced a 110,000-MT SRW wheat sale to an unknown destination split evenly between the current and upcoming marketing years.
Also today, traders digested 2013-14 projections from USDA's Chief Economist Joseph Glauber. He projects 2013 planted wheat acreage at 56 million, which if realized would be up just slightly from 55.7 million in 2012. But of more focus were his projection of record corn and soybean production, which provided spillover pressure to wheat.
Technical analysis: May Chicago wheat futures posted a downside day of trade on the daily chart and violated support to do more technical chart damage. Bears' next target is the June low of $6.79, followed by the May low of $6.65. Initial resistance is at this week's high of $7.52 1/2.
Hedgers: 75% sold on 2012-crop in the cash market. No 2013-crop sales advised yet.
Cash-only marketers: 75% of 2012-crop is sold. No 2013-crop sales advised yet.
Price action: Cotton futures were pressured by negative outside markets and indications of plentiful supplies in India to end 65 to 124 points lower, which was near session lows.
Fundamental analysis: The U.S. dollar index traded at its highest level since early September, which pressured cotton futures. Additional pressure came from official government statements from India that its current policy of unrestricted cotton exports would continue due to comfortable domestic supplies.
Traders will get fresh weekly export sales data tomorrow, as the report was delayed due to Monday's holiday. The report is expected to show a slowdown in demand to China, but its Lunar New Year celebration is now over, so improvement in demand is expected to be reflected in next week's report.
Technical analysis: May cotton futures posted a big downside day of trade on the daily chart, but remained within the boundaries of the uptrend established from the January low. Initial resistance is at yesterday's high of 85.24 cents, with support at last week's low of 81.35 cents.
Hedgers: 50% priced on expected 2012-crop production in the cash market.
Cash-only marketers: 50% priced on expected 2012-crop production in the cash market.