Price action: Corn futures faced pressure throughout the day and settled just off session lows with losses of 10 to 14 1/4 cents.
Fundamental analysis: Another lackluster weekly export sales tally this morning set the tone for a downside day of trade in the corn market as traders again focused on readying positions for tomorrow's USDA Supply & Demand Report. This reminded traders of expectations for USDA to raise its carryover estimate by 13 million bu. from last month to 615 million bu. due to slower export and ethanol demand.
Plus, Conab raised its Brazil production estimate to a record 76 MMT, which displaced concern about heat and dryness in some areas of South America this week. Sharp gains in the greenback added pressure.
Technical analysis: March corn futures traded through near-term support at the Jan. 24 low of $7.14 1/2, opening downside risk to the January low of $6.78. Resistance remains at last week's high of $7.46 1/4.
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: Nearby soybean futures spent time on both sides of unchanged today, but bears dominated action in deferred contracts and had the advantage into the close. Futures ended fractionally to 12 1/2 cents lower. Soymeal settled mixed, while soyoil posted moderate losses.
Fundamental analysis: Soybean futures struggled to rally around an impressive weekly export sales tally of nearly 1.67 MMT today as traders were more concerned with South American production and pre-report positioning. Conab, Brazil's equivalent of USDA, today raised its bean crop estimate by 0.7 MMT to a record (by a long shot) 83.4 MMT. When these supplies hit the export market in a few weeks, it will likely erode what has been very strong demand for U.S. beans.
Some traders also took advantage of dollar strength by booking profits and moving to the sidelines ahead of USDA's Supply & Demand Report tomorrow. (See "Evening Report" for pre-report expectations.)
Technical analysis: March soybean futures have posted nearly identical trading ranges each day this week. The contract must move above the December high of $15.01 1/4 to stage an upside breakout. The $14.77 area has acted as support every day this week.
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 closed mostly 5 to 12 cents lower in Chicago, 8 to 9 cents lower in Kansas City and 5 to 7 cents lower in Minneapolis. Futures at all three exchanges ended near session lows.
Fundamental analysis: With the corn market under pressure and supportive news limited today, it was a struggle to find buying interest in the wheat market. Preparations ahead of USDA's February Supply & Demand Report Friday morning didn't help bulls' cause as USDA is expected to modestly increase projected 2012-13 wheat ending stocks.
Traders biggest fundamental concern remains lackluster export demand. That was highlighted this morning by weekly export sales of 290,800 MT for 2012-13 and 10,000 MT for 2013-14, which barely topped the bottom end of the pre-report guess range. Without consistent export demand, traders feel they must continue to search for "value buying" at lower prices.
Rains forecast for areas of the Central and Southern Plains was also price-negative today. While the region remain stricken with drought, it's hard for traders to ignore a wet forecast, especially when there isn't any bullish news.
Technical analysis: March Chicago wheat futures continue to have a negative technical posture. Key support lies at the January low of $7.36 1/4. A drop through that level would open sharp downside risk as the next level of strong support doesn't come until the contract low at $6.52.
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 closed 27 to 32 points lower in old-crop contracts, while new-crop months were 25 to 39 points higher. Old-crop futures ended mid-range, while new-crop contracts finished high-range.
Fundamental analysis: Price action was relatively quiet and subdued to light bull spread unwinding as traders bided time ahead of USDA's Supply & Demand Report tomorrow morning. While traders aren't anticipating any major changes to the cotton balance sheet -- carryover is expected to be unchanged from January at 4.8 million bales -- they weren't willing to add new positions on either side of the market today. The light and choppy pre-report trade is likely to constrain price action again tomorrow morning.
Weekly export sales at 93,600 running bales for 2012-13 were down 29% from the previous week and 58% lower than the five-week average. Also, China was noticeably absent from the list of buyers. That's sparking some concern the runup in prices has curbed demand, especially from China. If that's the case, it will be hard to maintain or build on current price levels.
Technical analysis: March cotton futures continue to consolidate between roughly 80.00 cents and 84.00 cents. The breakout from this short-term consolidation range is likely to trigger the next trending move.
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.